By Ana Isabel Martinez and John McPhaul
SAN JOSE, Costa Rica (Reuters) - Prospects for a breakthrough in Honduras' political crisis looked dim on Sunday, with negotiators for deposed President Manuel Zelaya and coup leaders deadlocked over his proposed return to power.
After nearly 10 hours of closed-door meetings on Saturday at the residence of Costa Rican President and mediator Oscar Arias, negotiators appeared no closer to an agreement. Talks were to continue later on Sunday.
Envoys sent by Zelaya, a leftist ousted in a June 28 military coup, and interim leader Roberto Micheletti said the main stumbling block was Arias' proposal that Zelaya be reinstated and form a government giving his rivals a share of power.
Zelaya has pledged to return to Honduras even if the talks fail, but a previous attempt was blocked by the military and sparked violent clashes between his supporters and soldiers that left one protester dead.
From exile in Nicaragua, Zelaya says he is coming back "one way or another", a position that worries the U.S. government.
"We are indeed concerned about him going back," said a U.S. official, adding that Assistant Secretary of State Thomas Shannon "is in practically daily contact with him, urging him to allow (the) Arias process to play out."
Honduras' army toppled Zelaya and sent him on a plane out of the country last month on orders from the Supreme Court. Critics accused Zelaya of violating Honduras' constitution for seeking to extend presidential term limits.
Zelaya has upset Honduras' business elite and moderates in his own Liberal party by veering to the left after taking office in 2006 and allying himself with Venezuela's Hugo Chavez, a fierce critic of the United States.
The uncertainty of the talks puts Arias, a Nobel Peace Prize winner for his role in negotiating peace accords in Central America in the 1980s, in a tough spot as he tries to broker a solution to the region's worst crisis since the end of the Cold War.
The interim government has said Zelaya's return is not negotiable. Micheletti, who was appointed interim leader by Honduras' Congress after the coup, has threatened to arrest Zelaya if he returns and has put the army on high alert at key points across Honduras.
"At the moment there is no agreement on the points that are on the table," said Carlos Lopez, representing Micheletti, at the end of Saturday's talks.
The Organisation of American States and the U.N. General Assembly have called for Zelaya's return to power and no foreign power has recognized the interim government.
Arias on Saturday proposed Zelaya return to Honduras on July 24, according to a member of Zelaya's negotiating team.
(Additional reporting by Simon Gardner, Esteban Israel, Gustavo Palencia and Juana Casas in Tegucigalpa and Arshad Mohammed in Mumbai; Writing by Mica Rosenber; Editing by Kieran Murray)
