Honduran opposition leader key to ending conflict

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By Javier Lopez and Sean Mattson

TEGUCIGALPA (Reuters) - The front-runner in Honduras' presidential race has become a key to resolving a four-month conflict between a president ousted in a coup and the de facto leader who replaced him.

Porfirio "Pepe" Lobo leads polls ahead of the November 29 election and his National Party is the biggest opposition force in Congress, which must decide whether ousted President Manuel Zelaya can return to serve his last months in office.

With hundreds of millions of dollars in foreign aid and international recognition of the election contingent on Zelaya's return, the National Party is under pressure to support him, though its leaders say they are still studying options.

Zelaya, toppled in a June 28 coup, and the de facto leader Roberto Micheletti who replaced him, were pushed by U.S. diplomats to sign a deal last week to put an end to Central America's worst political turmoil in two decades.

Under the deal, the unicameral Congress is expected to come out of recess to vote on whether Zelaya's proposed return would be constitutional. The Supreme Court will first issue a non-binding opinion and no date has been set for the vote in Congress.

It was the Supreme Court that ordered Zelaya's arrest in June -- charging him with illegally trying to hold a referendum to change the constitution -- and Congress then appointed Micheletti to take over hours after the coup. Now the decision to end the crisis is thrown back to both institutions.

Zelaya, a leftist logging magnate, caused fissures in his ruling Liberal Party by moving closer to Venezuela's socialist President Hugo Chavez. He denies the accusations that he was trying to change the constitution to extend his term.

RISKS FOR LOBO

Micheletti represents the hardline wing of the Liberal Party, the biggest group in Congress with 62 seats, and it is expected to split on the question of whether Zelaya should return to the presidency until his term ends in January.

This puts the spotlight on the 55 conservative National Party lawmakers, who supported the coup in June but who could now back Zelaya.

"I think it's viable because the parties need stability and need the elections to be recognized," said Rolando Sierra, a historian at the National Autonomous University of Honduras.

Lobo has a double digit lead in opinion polls but Honduras could remain diplomatically isolated and possibly cut off from foreign aid if Zelaya is not reinstated before the vote.

The United States, the European Union and multilateral lenders suspended hundreds of millions of dollars in aid for Honduras -- one of the poorest countries in Latin America -- after the coup.

The government budget in the coffee and textile exporting nation is heavily dependent on foreign aid.

Some members of the National Party in Congress say they will base their decision on Zelaya on the recommendation of the Supreme Court, which is expected to maintain its stance that restoring Zelaya would be unconstitutional, but others said there may be a way to bring him back.

"If there was a legal way to do it from my point of view there's no problem in reinstating him," said National Party lawmaker Jorge Handal.

Lobo spokesman Miguel Angel Bonilla denies there is a pact between the candidate and Zelaya's supporters, but some politicians from other parties said there is.

"What (Lobo) has told us in private is that he will call on his party to support this accord," said Marvin Ponce, congressman from the leftist, pro-Zelaya Democratic Unification Party, whose six Congress members were blocked out of the chamber by police on the day of the coup.

The crisis has been a diplomatic headache for the United States and the region's other major power broker, Brazil.

Zelaya remains camped out in the Brazilian embassy in Tegucigalpa, where he took refuge after sneaking back into the country under cover in September.

Human rights groups have documented abuses by the de facto government, which has clamped down on protests and curbed civil liberties last month with a decree to temporarily shut down opposition news stations.

(Writing by Fiona Ortiz; Editing by Kieran Murray)

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