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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 deadlock sparked by an army-backed June 28 coup that sent Zelaya into exile.
Attempts to reach a deal have repeatedly snagged over whether the leftist president should be reinstated and allowed to complete his term, which ends in January.
"It's an insult to keep wasting time. There is not even the slightest will to fix the problem," Zelaya said of Micheletti from the Brazilian embassy in Tegucigalpa, where he has been holed up since slipping back into Honduras last month.
Zelaya, a 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.
His decision to drop negotiations appeared to be aimed at forcing the United States and Latin American governments to abandon their hopes of an agreement between the rival sides and instead put new pressure on Micheletti to step down.
The latest talks were engineered by the Organisation of American States, or OAS, whose special adviser John Biehl said on Friday he was leaving Honduras because of the impasse.
"This has been a very difficult dialogue. The issues are still hot. Rationality has not totally trumped emotions," Biehl told reporters. He said the OAS had not given up on talks and would return to Honduras if they reconvened.
Micheletti envoy Vilma Morales said Zelaya's move was a big surprise, but they were still open to dialogue.
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 of an offer they made in the first weeks after the June coup.
Tensions have been running high in the Central American coffee producer since Zelaya sneaked back into the country from exile and took refuge in the Brazilian embassy.
Micheletti was appointed by Congress after soldiers rousted Zelaya from his bed and flew him into exile. He 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 hide-out, 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, but it has not been able to force a breakthrough.
"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."
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.
Micheletti 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.
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. Police this week ordered new controls on the mostly pro-Zelaya marches.
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 some critics say Washington is not getting involved enough.
Biehl said most nations were reluctant to impose harsher economic sanctions on Honduras, one of the poorest countries in Latin America. International lenders froze aid and the United States cut military support soon after the coup.
(Additional reporting by Gustavo Palencia, Edgard Garrido and Ines Guzman in Tegucigalpa and Anthony Boadle in Washington; Editing by Catherine Bremer and Kieran Murray)

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