Mugabe's decades-long grip on power was dramatically weakened as military vehicles blocked roads outside the parliament in Harare and senior soldiers delivered a late- night television address to the nation.
"We wish to assure the nation that his excellency the president... and his family are safe and sound and their security is guaranteed," Major General Sibusiso Moyo said, slowly reading out a statement.
"We are only targeting criminals around him who are committing crimes... As soon as we have accomplished our mission we expect that the situation will return to normalcy."
But the generals' actions posed as a major challenge to the ageing Mugabe, 93, who has ruled Zimbabwe since independence from Britain in 1980.
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Tensions between the veteran leader and the military, which has long helped prop up his authoritarian rule, have erupted in public in recent days.
The ruling ZANU-PF party on Tuesday accused army chief General Constantino Chiwenga of "treasonable conduct" after he criticised Mugabe for sacking vice president Emmerson Mnangagwa.
Mnangagwa's dismissal left Mugabe's wife Grace, 52, in prime position to succeed her husband as the next president -- a succession strongly opposed by senior ranks in the military.
The US embassy warned its citizens in the country to "shelter in place" due to "ongoing political uncertainty".
Armoured vehicles in the capital alarmed residents as Chiwenga had warned of possible military intervention. The army's spokesman was not available to comment.
"The government's silence on the military deployments seem to confirm that President Mugabe has lost control of the situation," Robert Besseling, of the London-based EXX Africa risk consultancy, said.
"Any coup would be likely to involve the imposition of a curfew.
"The main indicator of a broader outbreak of violence would be the reaction of the Presidential Guard, which remains loyal to President Mugabe."
In speeches this year, Mugabe has often slurred his words, mumbled and paused for long periods.
His lengthy rule has been marked by brutal repression of dissent, mass emigration, vote-rigging and economic collapse since land reforms in 2000.