WRAPUP 7-Violence feared after Honduras crisis talks fail

(For full coverage of Honduras, click on [ID:nN28343997])

* Rivals fail to strike deal, talks break off

* Arias to take three more days to seek breakthrough

* Zelaya says he will return to Honduras next weekend

* OAS blames de facto government for stalemate (Adds fears of bloodshed, details throughout)

By Ana Isabel Martinez

SAN JOSE, Costa Rica, July 19 (Reuters) - Honduras' deposed President Manuel Zelaya and the de facto government that ousted him abandoned failed negotiations on Sunday and the mediator warned of bloodshed if they do not reach a deal soon.

Costa Rican President Oscar Arias, who is trying to mediate a peaceful settlement to the crisis, asked both sides for another three days to come up with a compromise deal to save Honduras from violence.

"Maybe, with this effort that we have to make over the next 72 hours, we can avoid bloodshed," he told reporters after the collapse of talks at his residence in San Jose, Costa Rica.

"What is the alternative to dialogue? ... What happens if, tomorrow, a Honduran shoots at a soldier and then a soldier shoots his gun at an armed citizen?," he said.

Zelaya, a leftist who was toppled in a June 28 military coup, said he would return to Honduras next weekend despite repeated warnings from his enemies that he would be arrested.

The U.S. government has tried to dissuade Zelaya from returning from exile in neighboring Nicaragua before a deal is reached with his rivals because it could escalate the crisis, but he told Reuters that "no one can stop me".

A previous attempt by Zelaya to fly home on July 5 was thwarted by Honduran troops who prevented the plane from landing in Tegucigalpa. At least one person was killed in clashes between troops and Zelaya's supporters at the airport.

The standoff in Honduras is the worst political crisis to hit Central America since the Cold War and poses a diplomatic challenge for U.S. President Barack Obama as he seeks to improve relations with Latin America.

Zelaya was hustled out of Honduras by the army after he upset the Honduran elite and Congress with attempts to extend presidential term limits.

He has won broad international support for his demand that he be reinstated, including from Obama's government and the U.N. General Assembly.