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By Mica Rosenberg
TEGUCIGALPA (Reuters) - Ousted Honduran President Manuel Zelaya pulled out of talks with the country's post-coup de facto leaders on Friday, throwing efforts to resolve a months-long political crisis back to square one.
Zelaya pulled his representatives out of meetings with envoys of de facto leader Roberto Micheletti that were the latest in a series of attempts to resolve the political deadlock sparked by a June 28 military coup.
"As of now we see this phase as finished," Zelaya envoy Mayra Mejia said shortly after midnight (7 a.m. British time) at the hotel where both sides have been negotiating for three weeks.
All attempts to reach a deal have snagged over whether Zelaya can return to power for the last few months of his term, which ends in January.
The leftist logging magnate said Micheletti's refusal to reinstate him will strip a November 29 presidential election of legitimacy and further isolate the caretaker government.
"All countries, without exception have condemned the coup and refused to recognise this election process, which will be full of irregularities and fraud," Zelaya told local radio.
Micheletti's negotiating team said the de facto leader would step down if Zelaya agreed to do the same to make way for a coalition government -- a near carbon copy from an offer they made in the first weeks after the June coup.
Negotiator Vilma Morales from Micheletti's camp said Zelaya's pulling out was a big surprise, but they were still open to negotiations.
Tensions have been running high in the Central American country since Zelaya snuck back into Honduras from exile last month and took refuge in the Brazilian Embassy.
Micheletti, appointed by Congress after soldiers rousted Zelaya from his bed and flew him into exile, claims the leftist was legally deposed for violating the constitution with a bid to extend presidential terms and cannot come back.
Zelaya denies doing anything unconstitutional and has lashed out at the way he has been kept inside his embassy hideout, with troops on order to arrest him if he steps outside. The army bombarded the embassy with loud recordings of marching band music and pig grunts one night this week.
The deadlock in Honduras is proving a challenge for U.S. President Barack Obama after he vowed better relations with Latin America. Washington suspended the visas of more figures in the de facto government this week to pressure a settlement.
"The two sides need to seal this deal now. Time is running out," U.S. State Department spokesman Ian Kelly said on Friday. "We have not given up on a deal yet ... We are focussed on these guys sitting down and agreeing," he said.
Zelaya was toppled after he upset business leaders, the military and politicians in his own party by moving Honduras closer to Venezuela's socialist president, Hugo Chavez.
The de facto government is touting next month's election as the only way to resolve the crisis. The campaign is in full swing and the two leading candidates are avoiding questions about Zelaya's return.
But human rights groups have documented major abuses, including deaths, since the coup and say recent clampdowns on media and protests make a fair election impossible. This week police ordered new controls on the mostly pro-Zelaya marches.
"They are promoting a crisis by forcing an election where the political opposition is persecuted," Zelaya said.
Obama's administration has yet to decide whether it will recognise the election as legitimate if Zelaya is not restored first. It has been urging the two sides to reach a deal but critics say Washington is not getting involved enough.
(Additional reporting by Adriana Barrera, Gustavo Palencia and Ines Guzman in Tegucigalpa and Anthony Boadle in Washington; Editing by Eric Beech)

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