In a speech to mark Zimbabwe's 26th anniversary of independence from Britain, President Robert Mugabe stepped up his warnings to opposition groups not to take to the streets to protest, while assuring Zimbabweans that the economy was improving.

Mr. Mugabe looks and sounds much younger than his 82 years. After energetically inspecting troops at the National Sports Stadium on the outskirts of the capital, he then addressed the large crowd in a lengthy speech in English and his native Shona.

He mostly dealt with progress in the country since last independence day, citing what he said would be an improved harvest this year following good summer rains.

Discussing the country's barely functioning economy, he blamed it on droughts in previous years and on what he called was an evil program of unjustified sanctions.

Although the European Union and the United States have imposed travel sanctions against Mr. Mugabe and his colleagues, neither has imposed sanctions on trade with Zimbabwe.

However, this year's independence day speech was unlike most of his key speeches in recent years. He did not attack British Prime Minster Tony Blair or President Bush. Some analysts say Mr. Mugabe has been persuaded by his colleagues to try and find common ground with the west because Zimbabwe is in such deep financial trouble.

But Mr. Mugabe did lay down a warning to opposition groups. He said they were playing with fire by threatening to organize what he called violent demonstrations to topple the government.

Morgan Tsvangirai, founding president of the now divided opposition party, the Movement for Democratic Change, recently said he would lead peaceful demonstrations in the streets to bring peaceful change.

Mr. Mugabe said, anyone "who dares lead any group of persons to embark on a campaign of violence ... will be inviting the full wrath of the law to descend mercilessly on him or those who follow him."

Some Zimbabweans say the warning from the president was unnecessary, as demonstrations are already crushed by police and soldiers soon after they begin.

But analysts say many Zimbabweans are growing so desperate that they are willing to take the risk of protesting, whatever the consequences. Inflation is the highest in the world at more than 900 percent. Recently, the World Health Organization warned that Zimbabwean women had among the lowest life expectancy in the world, and could only expect to live to between 34 and 38 years of age.

Mr. Mugabe gave no indication in his speech whether he was planning to retire ahead of 2008, when his present term ends.

Zimbabwe is awash with rumors, speculation and reports in some domestic newspapers that he is planning to step down this year.