Mugabe and opposition in Zimbabwe talks marathon

HARARE (Reuters) - Zimbabwean President Robert Mugabe was locked in long talks with opposition leaders on Sunday after signs they were about to reach a power-sharing deal to end a post-election political crisis.

The talks in a Harare hotel, mediated by South African President Thabo Mbeki, were still in progress nearly nine hours after Mugabe started meeting MDC opposition leader Morgan Tsvangirai and MDC breakaway faction leader Arthur Mutambara.

The discussions were seen as the clearest sign yet that an agreement, which could increase the chances of recovery from economic catastrophe, was within reach.

Talks began last month in the aftermath of Mugabe's unopposed re-election in June in a poll condemned throughout the world and boycotted by Tsvangirai because of attacks on his supporters.

Mutambara said in a newspaper article earlier that a compromise was close. He said that, despite limitations, it offered the "best temporary measure to extricate the country from its worst situation".

A deal could mean Mugabe has survived elections that posed the biggest challenge to his rule, but might also remove some of the power that has allowed him to govern with an iron hand.

Both sides are under pressure to reach a deal.

Zimbabweans and neighbouring countries hope an agreement could end years of political turmoil and revive an economy whose collapse has led millions of people to leave Zimbabwe.

Investors are nevertheless likely to remain cautious about making financial commitments, seeking tangible signs of long-term political stability and a government with the credentials to rebuild the country.

WAR HEROES

In a message to mark Zimbabwe's liberation war heroes holidays on Monday and Tuesday, Mutambara attacked Western powers, which have backed the opposition against Mugabe, accusing them of interfering in Zimbabwe's affairs.

"How does a Western country publicly pronounce that they will not recognize a government unless it is led by a particular leader without undermining the credibility and integrity of that individual?," Mutambara asked in the article.

A deal would require approval from security and military chiefs, powerful figures with broad influence over Mugabe who want to make sure they are not vulnerable to international prosecution when the political dust settles, analysts say.

A ZANU-PF official said a breakthrough was achieved 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, the official said.

MDC officials were not immediately available for comment.

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

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

(Additional reporting by Nelson Banya; Writing by Michael Georgy; editing by Andrew Dobbie)