Rival Honduran leaders struggle to form government

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By Fiona Ortiz

TEGUCIGALPA (Reuters) - Rival Honduran leaders struggled to form a compromise government in time to meet a Thursday deadline they agreed on last week to end the crisis over the ouster of deposed President Manuel Zelaya.

Zelaya and de facto leader Roberto Micheletti both insisted they must head a so-called unity and reconciliation cabinet to run the country until a new president is elected on November 29 and seated in January.

The impoverished coffee- and textile-exporting country has been isolated diplomatically and cut off from international aid since Zelaya was toppled in a June 28 coup that set off Central America's worst political crisis in two decades.

Zelaya and Micheletti signed a pact last week to end the standoff.

Micheletti's ministers tendered their resignations on Thursday to make way for a new cabinet, but the de facto government accused Zelaya of jeopardizing the process by refusing to present a list of his candidates for the cabinet.

Zelaya is "generating unnecessary uncertainty," de facto Presidency Minister Rafael Pineda told a news conference.

Pineda said other political parties had presented names for the cabinet. Zelaya, a leftist, says he will not help form a cabinet that he is not going to lead. He was scheduled to make a statement at midnight local time (6:00 a.m. British time Friday).

Pineda said Micheletti would only step aside as head of the government if Zelaya, who has been holed up in the Brazilian embassy in Tegucigalpa since sneaking back into the country in September, gave up his aim to lead the country again.

Earlier on Thursday, Zelaya said the pact was at risk of failing unless Congress held a special session immediately to restore him to power.

Negotiators and diplomats involved in the process of moving the agreement forward did not answer telephone calls or immediately respond to e-mails.

It was unclear whether the two leaders were bluffing while progress was being made behind closed doors, but some experts were pessimistic about a quick resolution.

'A DEAD END'

"This accord died today. They are at a dead end," said Edmundo Orellana, former defence minister for Zelaya and a constitutional expert.

Orellana said negotiators working for both sides had considered having the senior minister of the new cabinet be the head of government, but that he had advised them that was unconstitutional.

Zelaya says elections later this month will not be legitimate unless he is first restored to power to finish out the remainder of his term.

Honduran lawmakers in Congress must decide if Zelaya can retake the presidency. The United States and the Organisation of American States have stopped demanding Zelaya's reinstatement.

The U.S. Senate confirmed on Thursday a nomination to an important Latin American post that had been blocked for months by partisan feuding over the Honduran political crisis.

On a voice vote, the Senate confirmed Arturo Valenzuela for Assistant Secretary of State for Western Hemisphere Affairs.

Republican Jim DeMint had barred a Senate vote on Valenzuela since July to protest what he said were the Obama administration's efforts to try to force the restoration of Zelaya's left-leaning government.

DeMint said on Thursday he was no longer objecting to confirmation because Secretary of State Hillary Clinton had pledged to him that Washington would recognise the outcome of the Honduran elections later this month, regardless of whether Zelaya is returned to office.

Zelaya was forced out of the country by the military after a secret Supreme Court ruling said he had violated the constitution by launching a drive to have a referendum to determine whether to change term limits on the presidency.

Honduras allows its presidents to serve only one consecutive term.

Congress quickly installed Micheletti as interim leader, but his government has failed to win recognition abroad.

Hundreds of Zelaya supporters gathered outside of Congress on Wednesday to pressure for his return.

A small homemade explosive went off in a public bathroom a few blocks from the rally, damaging a door and plumbing, but no one was injured. Late on Wednesday night a grenade was set off at a radio station seen as more sympathetic to the Micheletti government, and one person was slightly injured.

(Editing by Paul Simao)

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