Zimbabwe leaders have so far failed to reach a breakthrough in power-sharing talks but President Robert Mugabe said a deal was still possible.

The parties ended a second day of make-or-break talks and planned to return to the negotiating table on Tuesday.

Asked if progress had been made in more than four hours of discussions, Mr Mugabe said: "Not at the present moment but we will continue."

The negotiations were seen as the best chance to end a post-election crisis and raise hopes of economic recovery.

Oppostion MDC leader Morgan Tsvangirai confirmed the talks had adjourned and said reporters would be advised of any progress.

An opposition source said a power-sharing agreement was being held up by Mr Mugabe's refusal to give up executive powers, while an official from the ruling ZANU-PF said Mr Tsvangirai's demands could scupper any chance of a breakthrough.

Negotiations began last month after Mr Mugabe's unopposed re-election in June in a poll condemned throughout the world and boycotted by Mr Tsvangirai because of attacks on his supporters.

The rival leaders ended a 14-hour meeting early on Monday.

Mugabe told supporters at a rally in Harare that there was progress in talks with Mr Tsvangirai and breakaway MDC faction leader Arthur Mutambara.

South African President Thabo Mbeki is mediating.

"We had a long night negotiating on some little hurdles and I thought I should raise my fist but he (Mr Mbeki) remained cool and said: 'Let us continue talking'," Mr Mugabe said in a speech to honour those who died fighting in Zimbabwe's liberation war.

He has been in power since independence from Britain in 1980.

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