Zimbabwean President Robert Mugabe and opposition leader Morgan Tsvangirai arrived at a Harare hotel for power-sharing talks yesterday that could end a post-election political crisis, a Reuters witness said.

Talks began last month in the aftermath of Mugabe?s re-election unopposed in June in a poll condemned around the world and boycotted by Tsvangirai because of attacks on his supporters.

Mugabe, in power since 1980, greeted reporters with a smile but made no comment as he arrived at the hotel, where Zimbabwe mediator South African President Thabo Mbeki was on hand. MDC leader Tsvangirai was also silent when he entered the hotel. Arthur Mutambara, leader of a breakaway faction of the MDC, was also expected to take part in discussions.

Biggest challenge to his rule

Mutambara said in a newspaper article earlier that a compromise agreement was close. He said that despite limitations it offered the ?best temporary measure to extricate the country from its worst situation?.

A deal could mean Mugabe has survived elections that posed the biggest challenge to his rule, but might also remove some of the power that has allowed him to govern with an iron hand. Both sides are under pressure for a deal.

Zimbabweans and neighboring countries hope an agreement could end years of political turmoil and revive an economy whose collapse has spilled millions of people across Zimbabwe?s borders.

Investors are nevertheless likely to remain cautious about making financial commitments, seeking tangible signs of long-term political stability and a government with the credentials to rebuild the country.

A senior ruling ZANU-PF official said yesterday that Tsvangirai, Mugabe and Mutambara were expected to hold three-way talks. Any deal would require a green light from security and military chiefs, powerful figures with wide sway over Mugabe who want to make sure they are not vulnerable to international prosecution when the political dust settles, analysts say.

A political coup for Mbeki

The ZANU-PF official said a major breakthrough was reached when the MDC agreed to recognize Mugabe?s legitimacy as president. He said Mugabe?s position was not negotiable. ZANU-PF had agreed on Tsvangirai as prime minister, but «not in the sense» of media reports which have said he will be given executive powers while Mugabe becomes a ceremonial president, said the ZANU-PF official.

MDC officials were not immediately available for comment. Helping to secure a settlement before he hosts an August 16 summit in South Africa of regional leaders he has represented in the mediation could be a political coup for Mbeki.

Mbeki has come under intense criticism at home and abroad for not taking a tough line with Mugabe, a policy he argues would only backfire and deepen tensions.

Nelson BANYA