SCENARIOS: Outcomes as Honduras enters crisis talks

TEGUCIGALPA (Reuters) - Talks will open in Honduras on Wednesday between de facto leader Roberto Micheletti and envoys of ousted President Manuel Zelaya, raising hopes of a shift in a political deadlock since a June military coup.

Micheletti has backed away from a hardline strategy since being widely criticized for curbing street marches and shutting down two pro-Zelaya media outlets last week, but the two sides have not budged over whether Zelaya can return to power.

The deposed leader slipped back into Honduras two weeks ago and has been holed up since then in the Brazilian Embassy, ratcheting up tensions in the poor Central American country.

Here are some possible outcomes from the talks:

LIMITED DEAL REACHED, TALKS DRAG ON

Negotiations will be based on the San Jose Agreement drafted by Costa Rican President Oscar Arias when he mediated early in the crisis. The document calls for Zelaya's reinstatement and a unity government through to a presidential election scheduled for November 29.

That accord could be modified, but without movement on the key issue of Zelaya's return the result may be a limited agreement to keep talking and concessions such as easing the security cordon around the Brazilian embassy.

Micheletti, who is enjoying a first visit from high level foreign dignitaries, may also be playing for time. He insists November elections are the key to ending the crisis.

Key questions remain on what happens to Zelaya. Business leaders have put forward a plan, which he has rejected, for him to accept house arrest until elections. He will likely stay at the Brazil compound if the siege there is eased and he is allowed to hold talks with political players and negotiators.

ZELAYA RETURNS WITH RESTRICTIONS

Suffering from international isolation, Micheletti's camp could compromise to let Zelaya return with restrictions on his authority to allay fears he will try to grab power.

That would mean accepting the basic format of the San Jose accord. But the details of how to form a unity government and amnesty that would make his return possible would take longer.

The United States and others are pushing for a deal, saying the November 29 election may not be recognized without a prior agreement involving Zelaya. That has presidential candidates pushing for an accord as they seek to secure legitimacy.

"Right now they have to figure out a way to potentially let him back but rein him in to prevent him from doing anything they ousted him for in the first place," said Heather Berkman, a Latin America analyst at Eurasia Group consultancy.

"That is going to take some time. The incentives and the pressures are there, the window of opportunity is only six weeks. It all comes down to the elections," she said.

THIRD PARTY ENTERS TO REPLACE MICHELETTI, ZELAYA

As frustration grows over the three-month crisis, both sides may be persuaded to compromise.

One proposal has been to let them select an acceptable third party who can manage the transition process until January, when Zelaya's presidency was due to end.

Micheletti has already said he is willing to step aside if it helps resolve the crisis. But Zelaya seems less willing to accept that option given the international calls for his legitimate return. Another hurdle would be finding someone or a provisional coalition acceptable to all parties.

TALKS FAIL, HONDURAS ISOLATED, STREET PROTESTS GROW

In the worst-case scenario, talks could fall apart over the key point of Zelaya's restoration.

Once new curbs imposed on media and public gatherings are lifted in the next few days, Zelaya's supporters could more easily take to the streets to press for his return.

Honduras, Zelaya and Micheletti would risk international condemnation and isolation if talks fail or drag on for weeks and protests or repression of them could spin out of control.

(Writing by Patrick Markey and Frank Jack Daniel, editing by Vicki Allen)