FACTBOX-What next in Zimbabwe's crisis talks

July 21, (Reuters) - Below are answers to some questions on what is likely to happen after Zimbabwe's political rivals signed a deal laying down the framework for formal talks on forming a power sharing government to end a deep crisis.

President Robert Mugabe and opposition leader Morgan Tsvangirai signed the agreement on Monday. The deal was mediated by South African President Thabo Mbeki.



WHEN WILL THE TALKS START

The talks are expected to start later this week.

Officials from both sides said the framework agreement sets a two-week deadline for the government and two factions of the opposition MDC to discuss key issues including a unity government and how to hold new elections.

Mbeki said the agreement committed the rival parties to an intense timetable.



WHAT WOULD COME FROM NEGOTIATIONS?

The question of who leads a unity government would be at the heart of any talks. Both sides sharply disagree on this point.

ZANU-PF will argue Mugabe is the country's legitimate leader as elected president, while the MDC will maintain that Tsvangirai is entitled to lead the nation based on his victory in the March 29 poll.

There are indications Tsvangirai might accept the prime minister's position as long as it came with strong executive powers, allowing Mugabe to remain as a nominal head of state. Mugabe is not seen agreeing to such an erosion of his power.

There is also the important question of what a unity government would do and whether its job would be to hold fresh elections within a specified time frame.

The longer any negotiations take, the more they might favour Mugabe since he is already in power and the attention of other countries could easily drift to other issues as the elections recede into the past.



WHAT IF THE CRISIS DRAGS ON?

The prospects of reversing Zimbabwe's economic meltdown are slim without a change in government. Mugabe refuses to consider reforms and Western powers are unlikely to provide the billions of dollars in development aid needed to bail out the economy.

Zimbabwe's neighbours could be swamped with an even bigger influx of refugees than the 3 million who already left. Investors keen to invest in Zimbabwe will keep plans on hold.



WHAT ROLE ARE AFRICAN LEADERS PLAYING?

African leaders have generally favoured the diplomatic approach although some want to punish Zimbabwe by banning Mugabe and his officials from meetings of the African Union and Southern African Development Community.

African countries have rejected the toughened sanctions sought by the United States, former colonial power Britain and other Western states and have played down prospects for sending peacekeepers to Zimbabwe, an idea some had floated.

Prospects for talks between Zimbabwe's rivals appeared to change late last week when Mbeki agreed to expand the mediation process to include the African Union, United Nations and other officials from the Southern African Development Community (SADC) as a "reference group."

The change came after Jean Ping, the AU's top permanent official and U.N. envoy to Zimbabwe Haile Menkerios held talks with Mbeki last Friday.

Expansion of the mediation beyond Mbeki has been a key demand of Tsvangirai who has strongly criticised the South African president, accusing him of favouring Mugabe.



WHAT DO WESTERN COUNTRIES WANT?

The United States and European Union already have visa bans and financial restrictions on members of Mugabe's inner circle as well as sanctions on arms exports. They are already discussing how to broaden their sanctions.

A global arms embargo on Zimbabwe is also an option, although it is unclear that it would be supported by key countries, including South Africa, Russia and China.

The European Union has said that only a government led by Tsvangirai can be seen as legitimate.

Western countries are wary of actions that could deepen the suffering of Zimbabweans, caught in the economic collapse of the once prosperous state. They also realise sanctions have done little but embolden Zimbabwe's elite to hold power.

(Reporting by Harare and Johannesburg bureaux; Editing by Matthew Tostevin)