SAN JOSE, Costa Rica - Talks on resolving Honduras' leadership crisis broke off Sunday after the interim government rejected a proposed compromise, saying a provision calling for ousted President Manuel Zelaya to serve out his term was "unacceptable."

The two sides remained deadlocked on the issue of Zelaya's return after a fourth day of negotiations, but the mediator, Costa Rican President Oscar Arias, promised renewed efforts to seek a solution and avoid bloodshed in the Central American country.

"It was not possible to reach a satisfactory agreement. The Zelaya delegation fully accepted my proposal, but not that of Mr. Roberto Micheletti," Arias said, referring to the interim president sworn in by congress after the June 28 coup.

Arias said he will spend the next three days "working much harder to see if we can reach an agreement, because what is the alternative to dialogue?"

On Saturday, Arias proposed a plan that would let Zelaya serve out the final months of his term, move up elections by one month to late October, grant a general amnesty and include representatives of the main political parties in a reconciliation government.

Arias, the 1987 Nobel Peace Prize laureate for brokering an end to Central America's civil wars, had urged patience from Zelaya and flexibility from the interim government, which has ruled since the military whisked Zelaya out of the country at gunpoint.

The Micheletti government endorsed several of his proposals on Sunday - but his foreign relations secretary, Carlos Lopez, rejected the overall plan, specifically citing the issue of Zelaya's return.

"Dear mediator ... I'm very sorry, but your proposals are unacceptable," Lopez said at a news conference after the talks. Arias' compromise, he added, "interferes with Honduran internal affairs."

The government that deposed Zelaya offered instead to create a truth commission to "let the Honduran people and the international community see all the acts that led to the current situation," according to a letter signed by Lopez. It refused to budge on its insistence that Zelaya would be arrested and prosecuted if he returns, guaranteeing only that he would be given "due process."

Lopez told CNN en Espanol that his delegation would return to the Costa Rican capital on Wednesday "to continue our conversations."

But Enrique Flores, a negotiator for Zelaya, said that while Arias may continue "personal efforts" to reach an agreement, formal talks are over.

"Today, the dialogue ended," Flores said.

Zelaya, who previously vowed to go back to Honduras to set up a parallel government if the talks failed, told The Associated Press that he was willing to leave "the door open for diplomacy and dialogue."

Aide Allan Fajardo has said Zelaya planned to return before Friday, the date suggested by Arias for his return.

"The president is preparing his return to Honduras, with or without an agreement," Fajardo said Sunday.

The Honduran military thwarted Zelaya's first attempt to fly home on July 5 by blocking the runway at the airport in the capital, Tegucigalpa.

The coup is a major test of Latin American democracy and of the Obama administration's policy toward the region. The U.S., the United Nations and the Organization of American States have demanded that Zelaya be reinstated, and no foreign government has recognized Micheletti.

In Washington, OAS chief Jose Miguel Insulza said Sunday that the international community continues to support Zelaya's return to power, and the Micheletti government needs to confront that reality.

"This is a coup that failed," Insulza told a news conference.

Honduran labour groups supporting the ousted president called for a general strike Thursday and Friday.

And in Nicaragua, Zelaya's Foreign Minister Patricia Rodas called for a massive march if mediation fails. She attended the 30th anniversary celebrations of the Sandinista revolution there on Sunday.

Honduras' Supreme Court issued an arrest warrant for Zelaya before the coup, ruling that his effort to hold a referendum on calling for a constitutional assembly was illegal.

Many Hondurans viewed the referendum as an attempt by Zelaya to push for a socialist-leaning government similar to the one his ally Hugo Chavez has established in Venezuela.

Zelaya, a wealthy rancher who shifted to left during his presidency, charged that the current constitution protects a system of government that excludes the poor. But he never specified what changes he wanted to make.


Associated Press writers Diego Mendez in San Jose, Costa Rica, and Mark Stevenson in Tegucigalpa, Honduras, contributed to this report.

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