A tentative plan to end Honduras' political crisis has not yet been agreed to by ousted President Manuel Zelaya and the country's de facto leader but sources said a deal looked closer.
Negotiators are struggling with the thorny issue of Mr Zelaya's restitution, a key demand both for him and countries including the United States that say democracy must return to the poor, coffee-exporting nation to validate elections scheduled for next month.
Mr Zelaya was forced into exile by soldiers on June 28th but he crept back into Honduras last month and took refuge in the Brazilian embassy in the capital to avoid arrest.
The coup caused Central America's worst political crisis in years and has also become a test for US President Barack Obama after he promised better relations with Latin America.
Victor Meza, the chief negotiator for Mr Zelaya in talks that started last week, said last night the two sides would resume talks in the morning with the aim of agreeing to the final details of a text aimed at ending the crisis.
"We are giving them an opportunity for peace," Mr Meza said. "We hope to have signed the agreement tomorrow at midday," he added.
The two sides have moved closer in recent days, but de facto leader Roberto Micheletti is resisting the push to bring his rival back to office.
Mr Obama has called for Mr Zelaya's return, cut some aid to Honduras and may not recognize elections on November 29th if democracy is not restored. But he is increasingly criticized by US Republicans for sticking up for Zelaya and so far has failed to pressure Micheletti into backing down.
Mr Zelaya supporters worry the talks have stalled and believe Micheletti wants to keep hold of power until the elections.
"No agreement the dialogue reaches will be valid if the coup leaders do not accept the immediate restitution of Manuel Zelaya," protest leader Israel Salinas read from a statement.
A couple of hundred demonstrators gathered near the hotel where the talks were held calling for Mr Zelaya's return.
After months of unruly protests, media crackdowns and aggressive policing, representatives of Mr Zelaya and Mr Micheletti sat down to try to thrash out a solution last week.
A wealthy rancher who moved to the left after taking office, Mr Zelaya angered conservatives by building close ties to Venezuelan President Hugo Chavez and toying with a reform of the constitution to change term limits for presidents.
US State Department spokesman Robert Wood called on both sides to keep talking. "What we're trying to do right now, from the US side, is to encourage them to continue, because, as I said, we're close, and we want to see this deal happen."
Dick Lugar, the top Republican on the US Senate Foreign Relations Committee, boosted Micheletti's drive to have the elections recognized by supporting a call for the Organization of American States to send observers for the vote.
He also called for Mr Micheletti to end curbs on media and protests.
Reuters