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By Mica Rosenberg and Gustavo Palencia
TEGUCIGALPA (Reuters) - The de facto Honduran government relaxed bans on protests and opposition media on Monday but toughened criticism of ousted President Manuel Zelaya, saying he was provoking insurrection.
Zelaya, forced out of the country by soldiers in a June 28 coup, slipped back into Honduras last month and took refuge in the Brazilian Embassy. De facto leader Roberto Micheletti responded by deploying soldiers around the embassy, imposing restrictions on press freedoms and banning large marches.
Micheletti promised to lift the emergency measures on October 5 after strong international criticism, but the decree was only finally reversed in the official gazette Monday.
A pro-Zelaya radio station, which had its offices raided by masked soldiers after the decree, began broadcasting and a shuttered television channel was back on the air.
Talks on how to resolve Central America's worst political crisis in decades restarted Monday although there was little sign of progress.
The main sticking point is the possible return to power of Zelaya, something sought by the United States and Latin American nations but rejected by the coup backers.
As representatives from both sides met in a hotel in Tegucigalpa, Micheletti's government accused Zelaya of trying to destabilize Honduras.
"Unfortunately, in recent days, ex-President Zelaya and his followers have promoted an agenda of insurrection in the country," it said in a statement.
At a recent meeting in Bolivia, leftist Latin American allies of Zelaya called for tighter international sanctions on the de facto regime, a move Micheletti's government said was an "illegal intervention."
Zelaya angered business leaders and rival politicians by moving Honduras closer to Venezuela's socialist President Hugo Chavez.
The coup has brought back memories of Central America's ugly past of civil wars and state-backed violence in the 1970s and '80s. It is a foreign policy headache for U.S. President Barack Obama, who promised better relations with Latin America.
Micheletti's negotiators want the Supreme Court to decide if the leftist can return to office.
But the same court ordered Zelaya's June ouster, saying he violated the constitution by seeking to allow presidential re-election, and is seen unlikely to let him back.
CAT AND MOUSE
Some analysts say Micheletti is stalling, hoping to stay where he is until a new president is chosen in a November 29 election. "I think they are just playing a cat-and-mouse game. There is no solution in the direction they are going," Honduran political analyst Juan Ramon Martinez said.
Vilma Morales, a Micheletti aide, said the court will have to consider if there are pending criminal charges against Zelaya when deciding if he can return to the presidency.
"Some question whether there will be bias (in the court). In my opinion there won't," Morales told a local news channel.
Zelaya, holed up in the heavily guarded embassy, wants Congress to decide on his return, which may mean he has rallied support among lawmakers who voted for his ouster in June.
Some in Congress criticized Micheletti for curbing civil liberties and human rights groups accuse his government of major abuses, including deaths.
Micheletti's government justified the strict decree even as it was overturned.
"Since this measure has been in place, there have been no marches by Zelaya supporters in the capital. Their objective was not just to protest but to commit crimes, destroy business, assault banks and supermarkets," a government statement said.
A small group of pro-Zelaya protesters gathered briefly near the hotel where the talks were being held Monday, but avoided clashes with riot police in the area.
Obama's administration has threatened not to recognise the winner of the elections if democracy is not first restored, but Micheletti's team hopes the United States and other foreign governments will buckle if the vote moves forward.
Foreign donors have pulled millions of dollars of aid from Honduras, one of the poorest nations in Latin America, but Zelaya wants tougher sanctions to destabilize Micheletti.
(Additional reporting by Adriana Barrera, Ines Guzman and Frank Jack Daniel; Editing by Doina Chiacu)

Reuters