OAS says to keep up pressure on Honduras

WASHINGTON (Reuters) - The Organization of American States said on Wednesday it would keep pressure on coup leaders that ousted Honduran President Manuel Zelaya last month, while supporting dialogue to end the crisis.

Secretary General Jose Miguel Insulza said the OAS would continue to apply "strong sanctions" on the interim government led by Roberto Micheletti and support mediation brokered by Costa Rican President Oscar Arias.

Fresh talks are set for Saturday.

"It is important to keep calm," Insulza told a meeting of the OAS permanent council in Washington, adding the regional grouping did not "have to do much more ... than keep applying pressure and so allow the process to bear fruit."

Zelaya was ousted by the military on June 28 and Micheletti installed by the Honduran Congress, presenting Central America with its worst political crisis since the Cold War era.

The coup and impasse in the impoverished exporter of bananas, coffee and textiles has also complicated the foreign policy of U.S. President Barack Obama, who has sought to improve ties with Latin America.

The OAS, a hemispheric pro-democracy body with limited actual powers, gave an ultimatum for the reinstatement of Zelaya and suspended Honduras from membership on July 4 after the interim government refused to restore him.

Zelaya, who says the coup is a power grab by rich political elites who oppose him, gave his own blunt ultimatum this week, saying Saturday's talks in Costa Rica were the last chance for the interim government to return power to him immediately.

Micheletti, who says the army lawfully removed Zelaya because he violated the constitution by seeking to lift limits on presidential terms, insists that the deposed president's reinstatement is not on the table for discussion.

Insulza said it was important to maintain the OAS suspension of Honduras while pursuing dialogue in the talks hosted by Arias -- "or at least until he says he needs some other kind of mediation."

COSTA RICA TALKS

The crisis has split Honduras, driving pro- and anti-Zelaya protesters onto the streets after his ouster, but the level of support for returning the deposed president is hard to gauge.

The former logging magnate, who has international backing for his return to office, had approval ratings of around 30 percent in the months leading up to the coup.

But a poll taken in the days after his ouster and published on Wednesday showed 46 percent of respondents rating him favorably, well above 30 percent for Micheletti.

Arias has invited delegations representing Zelaya and Micheletti to the fresh round of talks. But a spokesman for Arias, Esteban Arrieta, told reporters on Wednesday it was not envisaged that the two leaders would take part personally.

They had declined to meet face-to-face in initial discussions last week.

Despite the entrenched positions, Costa Rican Foreign Minister Bruno Stagno said he was still hopeful a deal could be struck between the delegations to keep the talks alive.

"It's not over until it's over," he said.

Zelaya has said he will press the ultimatum he laid down on Monday for the interim government to give him back power immediately. If not, he has threatened to abandon the talks.

As the crisis drags into its third week, the United States has urged the Honduran rivals to give dialogue a chance.

With the OAS urging continued sanctions and a negotiated settlement, a Honduran member of Congress who supports Zelaya's reinstatement asked the United States to step up sanctions on the interim government.

"We are calling for economic sanctions because it is the only way the coup leaders will give up power," Marvin Ponce, of the leftist Democratic Unification Party, told Reuters.

Ponce, part of a delegation meeting with U.S. lawmakers and government officials, called on Washington to suspend visas held by coup leaders and their families and to halt temporarily the transfer of remittances from Honduran workers living in the United States, among other measures.

(Additional reporting by John McPhaul in San Jose, Simon Gardner and Juana Casas in Tegucigalpa, and Pascal Fletcher in Mexico City; Editing by Catherine Bremer and John O'Callaghan)