Both sides in Honduras' leadership crisis July 7 signaled a willingness to forge a diplomatic solution to the deadlock over the fate of President Manuel Zelaya, who was ousted in June in a coup.

Roberto Micheletti AP PHOTO

Zelaya and interim Honduran leader Roberto Micheletti agreed to accept Costa Rican President Oscar Arias, a Nobel Peace laureate, as an international mediator. Arias' appointment was backed by the United States and announced by U.S. Secretary of State Hillary Rodham Clinton after she met privately with Zelaya at the State Department.

Arias will conduct the mediation in Costa Rica, where Zelaya intends to travel from Washington, and Clinton said she expected the process to begin soon.

"It is our hope that through this dialogue mechanism overseen by President Arias that there can be a restoration of democratic, constitutional order, a peaceful resolution of this matter that will enable the Honduran people to see the restoration of democracy and a more peaceful future going forward," Clinton said.

Zelaya said he was pleased with Arias' appointment. "I have accepted Dr. Arias' mediation," he said. He added that the step showed "the international community is still supporting democracy in Honduras."

Meanwhile in Honduras, Micheletti, who had vowed not to negotiate until "things return to normal," appeared to open some space for a settlement to the crisis that began June 28 when Zelaya was detained by the military and forced into exile.

Arias "is a man with a lot of credibility in the world," Micheletti told HRN radio. "We are open to dialogue. We want to be heard."