A week ago, a U.S.-brokered deal was hailed as a “breakthrough” for its potential to conclude a four-month-old tug-of-war for the country’s presidency. But today—the morning after de facto leader Roberto Micheletti announced the formation of a unity government without the ousted Manuel Zelaya—the deposed president declared the accord “dead.” Meanwhile, U.S. Senate Foreign Relations Committee member James DeMint (R-SC), who opposed the White House’s Honduras policy, lifted a hold on the nominations of Arturo Valenzuela for assistant secretary of Western Hemisphere Affairs and Thomas Shannon as U.S. ambassador to Brazil.

With a delegation from Washington in Tegucigalpa to push for an end to Honduras’ ongoing political stalemate, negotiators reached a power-sharing agreement late Thursday. The pact, termed a “breakthrough” by U.S. Secretary of State Hillary Clinton, allows for a “reconciliation and unity government.” The accord also lays a path for answering the sticky question of whether deposed leader President Manuel Zelaya will regain office. Approval of the deal could build international support for recognizing the November 29 elections.

With less than a month to go before those elections, the pact allows the Honduran Congress to vote on Zelaya’s reinstatement—a proposal the deposed leader’s negotiators previously put forth. Following news of the October 29 agreement, Zelaya said he was “optimistic I will be restored to the presidency.” The accord’s provisions call on both sides to recognize election results and the subsequent power transfer, ask the international community for normalized relations, reject amnesty for political crimes, and require creation of a truth commission to investigate events leading up to and following the June 28 coup.

More than two weeks after a surprise return to Honduras, deposed leader Manuela Zelaya remains confined in the Brazilian Embassy. A much-maligned emergency decree declared by interim leader Roberto Micheletti came and went, and the stand-off continues. While tensions simmer between Hondurans for and against Zelaya, Democrat and Republican lawmakers are locked in their own tit-for-tat over the U.S. role in Tegucigalpa standoff. An Organization of American States (OAS) delegation arrives in Honduras on October 7 to mediate in the three-month-old dispute over who should govern the country, raising questions about whether this group of mediators can succeed where other have failed.

In a dispatch, Reuters photojournalist Edgard Garrido describes the current scene inside the embassy compound, where he is confined with Zelaya supporters, a handful of journalists, and the ousted leader. The unlikely residents face food shortages, tear-gas fears, and concerns about what comes next. “With both sides so far apart, it's not at all clear when there will be an end to the crisis, or my unusual and uncomfortable assignment,” writes Garrido, who snapped a widely circulated photograph of Zelaya napping on an embassy sofa.

The Honduran de facto government found itself even more isolated September 3 when Washington terminated over $30 million in aid to the Central American country. The State Department had temporarily suspended aid after the June 28 coup when the military forced President Manuel Zelaya out of the country. The agency’s decision came as the deposed leader met with U.S. Secretary of State Hillary Clinton in Washington last week to make his case for stepped-up pressure on the interim government, headed by Roberto Micheletti. In return, the State Department announced not only the end of non-humanitarian aid, but also that it would revoke visas for some members of Micheletti’s regime and refuse to recognize upcoming elections if carried out by the de facto government.