TEGUCIGALPA, October 15, 2009 (AFP) - Negotiators struggled over the reinstatement of Honduras' ousted President Manuel Zelaya Thursday, pushing against a deadline for resolving a four month old political crisis.

"We're still at the negotiating table. The climate is extremely delicate and dangerous," Zelaya told AFP, insisting that he would stick to a midnight Thursday (0630 GMT, Friday) deadline for concluding the negotiations.

The two sides were trying to reach agreement on whether the Supreme Court or the Congress would have to approve Zelaya's reinstatement until elections are held and a new president takes office in January.

The head of the de facto government, Roberto Micheletti, on Wednesday rejected a deal under which the Congress would approve Zelaya's reinstatement, insisting it had to be the Supreme Court.

It was the Supreme Court that paved away for Zelaya's ouster June 28, ordering his arrest on 18 charges stemming from a bid to re-write the constitution. The Congress then named Micheletti to head an interim government.

Negotiators have said they have reached agreement on most points of a settlement, based on a accord proposed by Costa Rican President Oscar Arias.

Those include the creation of a unity government, and requirements that Zelaya drop plans to rewrite the constitution, and that the November polls be held on schedule.

Zelaya's reinstatement, however, has been the biggest stumbling block from the start of the crisis.

John Biehl, the head of the Organization of American States mission in Honduras John Biehl, criticized Zelaya's insistence on a midnight deadline for wrapping up the negotiations as "absolutely unnecessary."

After months of protests and crackdowns by security forces, representatives of Zelaya and Micheletti finally sat down together last week to try to hammer out a settlement.

In Washington, State Department spokesman Robert Wood said Thursday the negotiators were "making great progress," adding that the United States was striving "to encourage them to continue, because... we're close, and we want to see this deal happen."

The United States has called for Zelaya's return to office, suspended some 30 million dollars in financial aid programs and canceled the US visas of top regime officials.

Elected in 2006, Zelaya antagonized the country's elite by aligning himself with Venezuela's leftist President Hugo Chavez.

The political crisis has compounded economic woes in the nation of some 7.6 million people.

Meanwhile, Hondurans celebrated a public holiday Thursday after qualifying for the 2010 soccer World Cup, basking in a piece of good news after months of political tension.