Zimbabwe's political rivals have agreed on a draft constitutional amendment to allow them to form a power-sharing government, but obstacles remain, the opposition said yesterday.

On-off talks between President Robert Mugabe's Zanu-PF and opposition leader Morgan Tsvangirai's MDC have made little progress since they reached a deal in September seen as the best hope of pulling Zimbabwe back from economic collapse.

"We have reached an understanding, an agreement on the draft constitutional Bill, pending consultations and endorsement by our different leadership organs," MDC spokesman Nelson Chamisa said. Negotiators from Zanu-PF, the Movement for Democratic Change (MDC) and a breakaway MDC faction have been meeting with mediator Thabo Mbeki in South Africa to discuss the amendment, under growing regional pressure to finalise their deal.

Mr Chamisa said the talks had ended. Zanu-PF officials were not immediately available for comment.

The fact that the MDC appeared to be agreeing in principle to a Cabinet suggested serious progress given the party's strong resistance so far, said Mark Schroeder, director of risk analysis for sub-Saharan Africa at Stratfor.

Eldred Masunungure, a political science professor at the University of Zimbabwe, said the sides were under pressure from the unravelling economy and from the region.

"I think no one wants to be blamed for intransigence in such an environment," he said. "But I think we are still going to see some haggling over the other issues, and a final agreement is not yet a certainty. But I think it is close now."

Mr Chamisa said remaining issues included "the sharing of some Cabinet posts, the appointment of provincial governors and other senior government positions, have not been resolved". MDC leaders would meet next week to decide how to proceed, he said.

Many in the southern African country hope a deal will bring in a new government to end an economic crisis where unemployment stands at 90 per cent and official inflation is 231 million per cent. The real level is thought to be even higher. Some estimate that prices of basic goods are doubling every 24 hours.

An outbreak of cholera has killed nearly 400 people and UN agencies said yesterday it was "the tip of the iceberg" of a major health crisis.

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