By John McPhaul and Ana Isabel Martinez
SAN JOSE, Costa Rica (Reuters) - The two sides in Honduras' political crisis began make-or-break mediation talks on Saturday, which deposed President Manuel Zelaya has called the last chance for reaching a deal to reinstate him.
Costa Rica's Nobel Peace Prize-winning president, Oscar Arias, is trying to broker a compromise between Zelaya and interim president Roberto Micheletti, the former speaker of Congress who replaced him in a June 28 military coup.
Zelaya says the talks will be a failure unless Micheletti agrees to hand over the presidency, and vowed from exile in Nicaragua on Friday to return to Honduras "one way or another," regardless of the outcome of the negotiations.
His wife Xiomara Castro told Reuters that Zelaya had set a Saturday deadline for a deal in the talks.
As envoys from both sides arrived at his San Jose home for the meeting, Arias was cautious about his chances of success because neither man has backed down from their key demands.
"We're crossing this threshold aware of the challenges we face, but we're also convinced that there is no wall so high that we can't overcome it through willpower," he told reporters gathered outside.
The coup triggered the worst political crisis in Central America since the Cold War and poses a challenge for President Barack Obama as he tries to improve U.S. relations with Latin America.
The Honduran military, on maximum alert since Thursday, has boosted its presence in Zelaya's home region of Olancho, where hundreds of his supporters gathered on his ranch, and other places seen as possible points of return, an army source said.
Police ordered about 1,000 Zelaya supporters to disperse on Saturday when they blocked traffic near the airport in the capital Tegucigalpa.
In Costa Rica, Arias warned that the use of force to break the impasse would bring international condemnation.
"The international community has given its unanimous backing to this mediation process," Arias said. "However, that backing will not provide cover to those who seek to resolve this conflict by violent means. The use of force caused this problem and will never be its solution."
Some 50 pro-Zelaya protesters gathered outside Arias' home shouting "Down with the golpistas (coup-plotters)."
WAITING FOR A MIRACLE
Many fear violence if Zelaya tries to return in defiance of Micheletti's threats to have him arrested and put on trial for alleged political crimes.
When Zelaya tried to return a week ago, troops blocked the runway with army vehicles to prevent his plane from landing. One protester was killed in clashes with security forces at the airport.
"If he enters the country, I believe there will be violence, but it won't come from us," said Hugo Navarro, a history teacher on the protest march to Tegucigalpa airport. "It will be a miracle if things are resolved today."
Arias has said he will propose the creation of a coalition government to break the deadlock. He will also suggest an amnesty for any alleged political crimes as a step towards a truce.
The first round of negotiations in Costa Rica on July 9 ended without progress. Zelaya and Micheletti did not even meet face-to-face. The two men are not expected to meet on Saturday either, instead sending high-level delegations to San Jose.
Arias, the Organisation of American States and the U.N. General Assembly have all said that any solution to the crisis must include power being handed back to Zelaya.
But Micheletti says that is unacceptable. He has said he would consider stepping down or calling early elections, but on the condition Zelaya not be reinstated.
The military ousted Zelaya and whisked him out of the country, accusing him of violating the constitution by trying to extend presidential term limits.
(Additional reporting by Simon Gardner, Esteban Israel, Gustavo Palencia and Juana Casas in Tegucigalpa, and Ivan Castro in Managua; Writing by Louise Egan; Editing by Anthony Boadle)
