TEGUCIGALPA - An agreement to end a four-month political crisis in Honduras collapsed early on Friday after two rival leaders failed to form a unity cabinet to heal the damage from a June coup.

Ousted President Manuel Zelaya declared the pact dead just a week after it was signed and called on Hondurans to boycott presidential elections this month because de facto leader Roberto Micheletti moved to form a new government without him.

The rival leaders had agreed to form a so-called unity and reconciliation cabinet by Thursday, but they then clashed over who would lead the cabinet until Congress decided whether or not to reinstate Zelaya.

It's absurd what they are doing, trying to mock all of us, the people who elected me and the international community that supports me. We've decided not to continue this theater with Mr. Micheletti, Zelaya said.

Earlier, Zelaya declined to name any members to the cabinet that was supposed to be formed and Micheletti said he was going ahead without them.

We've completed the process of forming a unity government ... It represents a wide spectrum despite the fact that Mr. Zelaya did not send a list of representatives, Micheletti said in a televised speech to Hondurans.

Ministers from the de facto cabinet resigned to make way for the new government, which Micheletti said will include names put forward by different political factions.

The impoverished coffee and textile-exporting country has been isolated diplomatically and cut off from international aid since Zelaya was toppled by soldiers and sent into exile in his pajamas in a June 28 coup.

Zelaya sneaked back into Honduras in September and has been holed up in the Brazilian embassy in the capital ever since.

The worst crisis in Central America in 20 years brought back unwelcome memories of decades of military regimes, human rights abuses and political instability that plagued Latin America during the Cold War.


The United States and the Organization of American States, or OAS, had pushed the two sides to negotiate a way out of the crisis and celebrated last week's accord, but it turned out to contain too many internal contradictions to be successful.

Zelaya insisted that elections scheduled for Nov 29 will not be legitimate unless he is first restored to power to finish the remainder of his term that ends in January. But the accord did not guarantee his restitution.

Last week's agreement left it up to the Honduran Congress to rule on Zelaya's return to the presidency, but lawmakers were not given any deadline and dragged their feet this week on convening for a vote.

Once the accord was signed, the U.S. agreed to recognize the results of the elections even if Zelaya was not reinstated, backing down on earlier demands that he return to power.

Now the U.S. and the OAS are faced with the possibility that Micheletti, a leader they condemned and refuse to recognize, will hand over the presidential sash to the newly elected president in January.
Zelaya was forced out of the country by the military after a secret Supreme Court ruling said he had violated the constitution by launching a drive to have a referendum to determine whether to change term limits on the presidency.

Congress quickly installed Micheletti as interim leader, but his government has failed to win recognition abroad and human rights groups documented abuses including deaths and the suspension of civil liberties.

Honduras is now polarized between ardent Zelaya supporters and Hondurans concerned that he might have drawn their country closer to Venezuela's leftist President Hugo Chavez.

A grenade exploded in an office building in downtown Tegucigalpa after Micheletti spoke, police said, but there were no other immediate signs of turmoil after the political crisis deepened again.

On Wednesday night a grenade exploded in a radio station sympathetic to Micheletti, slightly injuring one person. On Thursday a homemade explosive device went off in a public toilet a few blacks from a pro-Zelaya rally, damaging a door and plumbing but injuring no one.

(Additional reporting by Gustavo Palencia, Sean Mattson and Mario Naranjo, writing by Fiona Ortiz, editing by Anthony Boadle)