Mugabe and opposition MDC leader Morgan Tsvangirai have failed to reach agreement in over one month of post-election power-sharing negotiations aimed at ending a political crisis that has worsened Zimbabwe's devastating economic decline.

All parties would participate in the negotiations in South Africa and no deadline for an end to the discussions has been set, said South Africa's deputy minister of foreign affairs Aziz Pahad.

"We do hope that these talks can lead to the finalisation of all outstanding matters, so that we can start with normalising the economic, political and social situation in Zimbabwe," he said.

Zimbabwe's state-owned Herald newspaper earlier quoted Justice Minister Patrick Chinamasa, chief ZANU-PF negotiator, as saying: "There was no need for more talks since there was a deal already on the table that was waiting to be signed."

But Tsvangirai's Movement for Democratic Change said it would not sign the deal in its current form, although it remained committed to talks.

MDC spokesman Nelson Chamisa said it was "ridiculous" for ZANU-PF to insist on Tsvangirai's signature without addressing "deficiencies" in terms of executive powers, the main sticking point.

DEFIANT MUGABE

"ZANU-PF has dug a hole for itself. It is a tragedy that they want to continue to dig. We will not co-operate with them if they go ahead with their plans to form a government before the talks reach their logical conclusion."

Chamisa confirmed that the main MDC negotiating team was in South Africa but "as to when or whether talks are going to resume, I cant say at the moment".

Mugabe, who reopened parliament this week in defiance of opposition objections, has said he would soon form a new government without the main opposition MDC. He said it was not willing to join the new administration.

Mugabe was re-elected unopposed in a June vote boycotted by Tsvangirai because of violence and condemned around the world.

Regional heads of state in the Southern African Development Community (SADC), which mandated South African President Thabo Mbeki to mediate in the Zimbabwe talks, have so far failed to push the parties into a deal.

Pahad said he was not sure if Mbeki would be mediating in this latest round of talks.

Despite several setbacks, political analysts say that international and regional pressure will eventually force ZANU-PF and the main opposition MDC to reach a deal.

The breakaway, smaller MDC faction led by Arthur Mutambara is also part of the negotiations. It has taken a softer line than Tsvangirai's camp and analysts say it has moved closer to Mugabe, in power since independence from Britain in 1980.

The economic price of the deadlock is rising by the day.

Severe food, fuel and foreign currency shortages are worsening. The hardships, which also include the world's highest annual inflation rate of over 11 million percent, have already driven millions of Zimbabweans to neighbouring countries, straining regional economies.