Ousted Honduran president issues talks ultimatum

By Gustavo Palencia and Ivan Castro

TEGUCIGALPA/MANAGUA (Reuters) - Ousted Honduran President Manuel Zelaya warned on Monday he will deem mediation talks over the country's political crisis "failed" unless he is reinstated at the next meeting, likely this weekend.

Mediator Costa Rica said on Monday it may call Honduras' interim government and Zelaya's negotiators within eight days for fresh talks. One of Zelaya's negotiators, Milton Jimenez, said the next round would be held on Saturday or Sunday.

The talks began last week and stopped after two days, making scant progress.

Zelaya insists on his reinstatement after the June 28 coup. But Roberto Micheletti, installed as interim president by Honduras' Congress, is adamant Zelaya cannot return to power under any circumstances because was seeking to illegally extend his rule through the lifting of presidential term limits.

No foreign government has recognized Micheletti as president. The United States, the Organization of American States and the U.N. General Assembly have called for Zelaya to be restored to office after the coup in the impoverished Central American country.

"We are giving an ultimatum to the coup regime, that at the latest in the next meeting this week in San Jose, Costa Rica, they should carry out the expressed (OAS and U.N.) resolutions (to reinstate me)," Zelaya told a news conference in Managua.

"If not, then this mediation will be considered to have failed," he added, wearing his trademark white cowboy hat.

DIPLOMATIC TEST

A spokesman for Costa Rican President Oscar Arias, who won the Nobel Peace Prize in 1987, confirmed the mediator intended to issue a fresh invitation to the two sides "within a period of eight days" but could not give a precise date.

Time was on the interim government's side, said Mark Ruhl, a Honduras specialist at Dickinson College in Pennsylvania.

"The longer this goes on, the better it is for Micheletti. The downside is if the United States decides to squeeze the government financially. But if you were Micheletti, why would you leave?" he told Reuters.

Honduras, which exports bananas, coffee and textiles, has a long history of coups, returning to democracy only in the 1980s after 20 years of mainly military rule.

The Honduras crisis is a diplomatic test for U.S. President Barack Obama after he vowed a fresh start with Latin America, where Washington has in the past been accused of backing coups and dictatorships that served its interests. Obama has condemned the Honduras coup as illegal.

Micheletti on Sunday held out the possibility of an amnesty for Zelaya if he returns home quietly and faces justice. It appeared to be the interim government's first conciliatory offer to help defuse the worst crisis in Central America since the Cold War.

Zelaya dismissed the gesture.