Swiss President Pascal Couchepin said he would be "extremely disappointed" if the initiative was approved.
"In the end, the people will not succumb to the xenophobic and anti-foreigners calls," he told journalists on Tuesday.
A Swiss People's Party poster in support of the initiative shows a drawing of brown hands grabbing Swiss passports from a box.
Maria Lazarte, a 27-year-old communications officer from Peru who intends to apply for Swiss citizenship, said the campaign posters were xenophobic.
"It's horrible. It makes you feel like you're not wanted here," she said.
More than 20 percent of the 7.5 million population in Switzerland are foreigners - one of the highest percentages in Europe. And children born in Switzerland to foreign parents have no automatic right to Swiss citizenship and must go through a naturalization process.
Each state decides the process by which foreigners can become Swiss citizens. Rejected applicants can appeal to the Supreme Court if they claim discrimination or violation of other basic rights.
Applicants undergo evaluations that cannot even begin until they have lived here for 12 years, one of the longest requirements in Europe. Most major countries are in the four- to eight-year range.
The Federal Tribunal abolished community votes on immigrants five years ago after a referendum in the central Swiss town of Emmen rejected all 48 East European and Turkish candidates for citizenship even though they had been thoroughly reviewed and approved as good inhabitants by local authorities. Only eight Italians were approved.
Five former Yugoslavs among those rejected appealed to the Supreme Court, which held that they had been discriminated against because of their ethnic and religious origin. The court said in a separate ruling that applicants had a right to know the reason for their rejection, which a public vote makes impossible.
Opinion polls have been volatile. After a survey in April had predicted adoption of the initiative, the latest poll carried out this month for the state-owned Swiss television network indicated that 56 percent would vote against it. There was a margin of error of 2.9 percent, according to the pollster gfs.bern.