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Sao Tome and Principe's putschists and international mediators were set to continue talks today, as the deposed president of the west African archipelago insisted the coup leaders return to their barracks before he negotiate with them.

Yesterday's talks between a 30-strong mediation team and army rebels led by Major Fernando Pereira took place amid signs of progress, after the late-night release of seven ministers and a legal adviser, held since last week's coup.

The officials were freed after Pereira and the head mediator, Congolese Foreign Minister Rodolphe Adada, agreed that they would be placed under military surveillance at their homes - as were three women ministers freed earlier - and barred from trying to "exert any pressure" on negotiations.

The mediator and the junta both hailed the officials' release as a breakthrough that would help pave a way out of the crisis.

Deposed president Fradique de Menezes welcomed the move, but still felt that those responsible for last Wednesday's power grab had not yet fulfilled all the conditions necessary for his return, his spokesperson said yesterday.

Guillaume Neto, media adviser to the ousted leader who has been stranded in the Nigerian capital, said the release of the government figures had been one of the preconditions for his return.

"The conditions for his return are that the prisoners are liberated, the military return to their barracks and that constitutional order be restored," Neto said by telephone from de Menezes' Abuja hotel.

"Once those conditions are met the president can return home and discuss the military's concerns," he said.

Nigerian President Olusegun Obasanjo held talks with the ousted leader yesterday in Abuja, during which he stressed that Nigeria was working in concert with the international mediators in Sao Tome.

Meanwhile, Pereira's putschists and the mediation team from several Portuguese-speaking and African countries, as well as the US, met at UN offices in the capital of the impoverished archipelago in west Africa's Gulf of Guinea.

The negotiators represent eight countries - Angola, Brazil, Cape Verde, Congo, Gabon, Mozambique, Nigeria and Portugal.

The talks are also being held under the auspices of the African Union, which has expressed its determination to end military takeovers and civil wars in Africa.

The rebel delegation has included seven military and three members of the Christian Democratic Front (FDC), which is not represented in parliament.

The FDC head Arlesio Costa, not an army member, also attended the talks wearing military fatigues. Political sources have said Costa was the real coup leader.

The Gabon-based US ambassador to Sao Tome, Kenneth Moorefield, who was in Sao Tome when the coup occurred, remained in the country and was also participating in international mediation efforts.

In Washington, the US welcomed the ministers' release but called for full restoration of the elected government.

"We continue to urge a peaceful, nonviolent resolution in Sao Tome, including allowing the elected government to continue to function," deputy State Department spokesperson Philip Reeker told reporters.

Speaking in South Africa, the Prime Minister of Cape Verde, Jose Maria Neves, told reporters in Pretoria that democracy was on the way to being restored in Sao Tome.

The coup leaders "have freed the people they imprisoned at the time of the coup.

They have said they want to return power to the democratic institutions".

"One can almost say that democracy is on its way to being restored in Sao Tome and Principe," he said.

Despite de Menezes's isolation in neighboring Nigeria, he was seen by several diplomats participating in the Sao Tome talks as being the best choice for the leadership of the impoverished island nation.

But others in Sao Tome were skeptical, and one source scoffed at the talks, calling them a "masquerade".

"This mediation isn't getting to the heart of things, and the problems will only begin again... Fradique (de Menezes) is the real problem in Sao Tome," the source said.

Junta leader Pereira, known by the nickname "Cobo", described the coup last week as "an SOS to the international community" over rampant corruption on the tiny islands that are home to 140 000 people.

Many residents of Sao Tome voiced hope that the coup would result in an improvement in their quality of life, where the average annual income is around $280.

The archipelago is burdened by one of the highest per capita debt ratios in the world and is heavily dependent on foreign aid, although it is banking on future revenues from substantial offshore oil reserves. – Sapa-AFP.

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