Zimbabwe deal possible Sunday: ruling party

HARARE (Reuters) - Zimbabwean President Robert Mugabe could sign a power-sharing deal on Sunday that names opposition leader Morgan Tsvangirai as prime minister, a senior ruling party official said on Saturday.

The official said Mugabe's ZANU-PF, after more than two weeks of talks seeking to end a post-election crisis, wants any unity government to last five years.

Movement for Democratic Change (MDC) leader Tsvangirai would be premier although his powers were still under discussion.

"There could be a signing tomorrow, after the leaders have met to thrash out the remaining issues," the official, who asked not to be named, told Reuters.

The ZANU-PF official said a major breakthrough was reached when the MDC agreed to recognize Mugabe's legitimacy as president. He said Mugabe's position was not negotiable.

ZANU-PF had agreed on Tsvangirai as prime minister, but "not in the sense" of media reports which have said he will be given executive powers while Mugabe becomes a ceremonial president, said the ZANU-PF official.

MDC officials were not immediately available for comment.

Mugabe will meet Tsvangirai on Sunday to discuss forming a possible unity government, Mugabe's spokesman George Charamba said earlier.

News of the meeting is the clearest sign yet that the parties could be close to a deal after a disputed vote in March. Charamba said Arthur Mutambara, the leader of a breakaway MDC faction, would also participate in the talks.

SECURITY CHIEFS KEY

South African President Thabo Mbeki arrived in Zimbabwe on Saturday to mediate power-sharing talks between the ruling party and the opposition.

Any deal would require a green light from security and military chiefs, powerful figures with wide sway over Mugabe who want to make sure they are not vulnerable to international prosecution when the political dust settles, analysts say.

Although no details of the power-sharing talks have been disclosed, several Zimbabwe analysts believe Mugabe is only ready to surrender some executive powers and will try to retain control of crucial state organs.

"They want an agreement for a process leading to the adoption of a new constitution, one that was agreed to by the parties during last year's negotiations. But we're saying this should be an issue for a national referendum," said the MDC official.

Mutambara heads a smaller faction of the MDC which split in 2005, but the two sides agreed to work together in parliament during the elections.

The MDC wants any power-sharing arrangement to last two-and-a-half years, the ZANU-PF official added.

Should an agreement be reached, it could take at least two weeks to convene parliament and push through expected constitutional changes creating new government posts and implement other aspects of the deal, analysts say.

The two sides are under heavy pressure to resolve a deepening crisis that has ruined the once prosperous economy and flooded neighboring states with millions of refugees.

Investors are likely to remain cautious about making financial commitments in Zimbabwe, seeking tangible signs of long-term political stability and a government with the credentials to rescue the economy, analysts say.

Zimbabweans are longing for a government which can ease the world's highest inflation rate officially estimated at 2.2 million percent and chronic food, fuel and foreign currency shortages.

Mugabe, aged 84 and in power since 1980, welcomed Mbeki at the airport and they drove off together to a Harare hotel.

Helping to secure a settlement before he hosts an August 16 summit in South Africa of regional leaders he has represented in the mediation could be a political coup for Mbeki.

Mbeki has come under intense criticism at home and abroad for not taking a tough line with Mugabe, a policy he argues would only backfire and deepen tensions.

(Additional reporting by Cris Chinaka)

(Writing by Michael Georgy, edited by Richard Meares)