Asked about the idea of having Zelaya return to Honduras as president with a reconciliation government made up of representatives from all political parties, Assistant Foreign Minister Martha Lorena Alvarado gave a one-word response: "Impossible."

Her comment in Honduras' capital, Tegucigalpa, was the clearest indication yet that the U.S.-backed talks mediated by Costa Rican President Oscar Arias to find a solution to t

he turmoil caused by a coup had reached a deadlock. "The reinstatement of Zelaya, as we have maintained and now repeat, is not negotiable ... there is no possibility of him returning to Honduras as president," Alvarado said.

A Zelaya representative, Enrique Flores, earlier said his side had accepted Arias' plan "in principle" but added that the government led by interim president Roberto Micheletti was balking at the key point: allowing Zelaya's return to power. He said that would kill the negotiations.

"We will declare the talks a failure" if there is no progress in the final hours of negotiations late Saturday, Flores told The Associated Press. "If they don't accept the first point, the mediation has no purpose."

Zelaya has vowed to slip back into Honduras to reclaim the presidency if talks fail and Micheletti has promised to arrest him upon arrival. The crisis over the June 28 coup has become a key test for democracy in Latin America and for U.S. diplomacy in the region.

As talks began Saturday, Arias issued a statement proposing a plan that would let Zelaya serve out the final months of his term, move up elections by one month to late October, grant amnesty for all political crimes committed before and after the June 28 coup, and include representatives of the main political parties in a reconciliation government.