* EU warns of further sanctions after July steps
* Calls for peaceful settlement ahead of elections
BRUSSELS, Sept 15 The European Union warned the de facto government of Honduras on Tuesday it risked further sanctions unless a peaceful solution is found to a crisis triggered by the coup against President Manuel Zelaya.
A statement approved by EU foreign ministers meeting in Brussels said the 27-nation bloc would continue to restrict political contacts with the de facto government installed after the June 28 military takeover and warned of tougher sanctions.
"Until a peaceful settlement is found, the EU will stand ready to take further restrictive measures including targeting those members of the de facto government who are seen to be blocking progress on a negotiated solution," it said.
In July, the European Commission said it was suspending all budgetary support payments to Honduras after the failure to resolve a crisis. It has also suspended development assistance.
On Tuesday the European Union reaffirmed its support for mediation by Costa Rican President Oscar Arias and the Organization of American States and called on all parties to work for a peaceful negotiated solution and a restoration of the constitutional order ahead of November elections.
It also expressed deep concern about reported human rights violations, including threats to rights activists, arbitrary detentions and repression of peaceful demonstrators.
"The resolution is important because it means a zero tolerance towards the coup in Honduras and against the authorities that participated in this coup or against the people that are now an obstacle to coming back to normality," Diego Lopez Garrido, Spanish junior minister for EU affairs said.
The United States announced last week it was terminating more than $30 million in non-humanitarian aid to Honduras to pressure the de facto government to step down and reinstate Zelaya, who is in exile. (Reporting by Bate Felix and Julien Toyer; Editing by David Brunnstrom and Jon Hemming)