Mediation talks to solve the political deadlock in Honduras following a military coup dragged into a second day on Sunday as deposed President Manuel Zelaya's team said time was running out for a diplomatic solution, according to Reuters. Costa Rican President Oscar Arias is trying to broker a deal between the leftist Zelaya and de facto leader Roberto Micheletti, who replaced Zelaya after he was toppled on June 28. Arias laid out a seven-point proposal for agreement on Saturday, centering on the reinstatement of Zelaya and the formation of a unity government that would share power with his rivals. The talks, which follow an initial fruitless round of negotiations on July 9, ended without agreement on Saturday and resumed on Sunday. Here are some scenarios on how the talks could play out: Sunday's talks will struggle to break the stalemate. Both Zelaya, backed by widespread world condemnation of the coup, and Micheletti are maintaining seemingly irreconcilable positions and both claim constitutional legitimacy. Zelaya, who says the coup is a power grab by rich political elites who oppose him, laid down a blunt ultimatum, saying the talks were the last chance for Micheletti's interim government to hand power back to him. The ousted president, bolstered by resolutions from the Organization of American States (OAS) and the United Nations General Assembly calling for his restoration, says the only topic for the talks should be his return to office. Micheletti, who says the army lawfully removed Zelaya because he violated the constitution by seeking to lift limits on presidential terms, insists his reinstatement is not on the table for discussion. The rival leaders declined to meet face-to-face on Saturday and were not expected to on Sunday, sending high-level delegations instead. If Zelaya can be persuaded to back away from his ultimatum, there could be further talks, but most analysts agree that time is on the side of the interim government if it can hold out until scheduled elections on Nov. 29, which Micheletti says will go ahead. Given the entrenched positions and Zelaya's ultimatum, there is a significant chance of the talks breaking down. This could lead to more risky unilateral actions and initiatives that could escalate the crisis. In his ultimatum threatening to quit the talks if he is not restored immediately, Zelaya said he would then pursue "other measures," which he did not specify. But he has repeatedly said he will seek to return to his country "any day, any time," a strategy which provoked confrontation and violence when he attempted to fly back in a Venezuelan plane on July 5. Honduran troops and police prevented his plane from landing and clashed with pro-Zelaya demonstrators. At least one person was killed and several injured by gunfire. Venezuela's Chavez has stoked the crisis by dismissing the talks as a dead end and announcing Zelaya's imminent return. Chavez, put troops on alert when Zelaya was toppled last month, and the two will be together on Sunday in Nicaragua for anniversary celebrations of that country's revolution potentially ramping up the threatening rhetoric. Zelaya stands to lose support from Washington if he returns immediately. State Department officials are trying to persuade him to let the mediation process run its course. While Zelaya has said he is committed to nonviolence, he has repeatedly brandished the threat of "popular insurrection," saying Hondurans who oppose his ouster have the constitutional right to reject the "usurper" government. Almost daily street protests demanding Zelaya's restoration do not appear to seriously threaten the interim government's control. But international port unions have called for a boycott of ships flying the Honduran flag, and the looming threat of further economic or visa sanctions from the international community could potentially raise internal opposition to the interim leaders. The United States, Honduras' main trading partner, could be decisive in this. BREAKTHROUGH OR COMPROMISE ACHIEVED Arias has said he believes there could be an easing of positions on both sides of the conflict, despite the inflammatory public rhetoric. Micheletti has held out the possibility of stepping down to make way for a coalition government on the condition Zelaya does not seek a return to power. He also said he would consider an amnesty for Zelaya if he agrees to return quietly to Honduras and face justice for his alleged violations of the law. But given Zelaya's insistence that only reinstatement can solve the crisis, both options may be rejected out of hand. The interim government has also suggested bringing forward the November elections, although neither Micheletti nor Zelaya would run for the presidency. The OAS, which suspended Honduras after the coup, has said it will not recognize the outcome of any elections held under the interim government. A breakthrough looks tough, but the Costa Rican mediators hope talk and compromise will prevail over confrontation.