Honduran President Manuel Zelaya, ousted in a military-backed coup four months ago, said Friday that a US-brokered deal to end the nation's political crisis had collapsed.

- We have practically decided not to continue with this theater of Mr Micheletti - Zelaya said, speaking on Radio Globo from his refuge in the Brazilian embassy.

Zelaya aides said the deal had failed after the de facto leadership of Roberto Micheletti formed a new "national unity" government without Zelaya's participation.

Hundreds of Zelaya supporters marched Friday toward the Brazilian embassy, where the ousted leader has been since September 21, to protest the latest setback.

The announcement dealt a blow to US diplomats, including Secretary of State Hillary Clinton, who had hailed last week's agreement as a triumph for democracy.

The head of the Organization of American States, Jose Miguel Insulza, called Friday for the agreement to be met "without subterfuge."

- The measures approved under the deal are clear and were endorsed freely by the parties. I hope that without more subterfuge they'll carry it out - Insulza said in a statement.

The accord had given Zelaya and de facto leader Roberto Micheletti's camps until midnight Thursday to set up a reconciliation government to represent both sides.

Shortly before midnight, Micheletti announced a unity government without including Zelaya ministers.

- We've finalized the formation of the cabinet of reconciliation and unity inside the established limit - Micheletti said.

Zelaya had refused to present nominees for ministerial posts unless he was first reinstated to "reverse the coup" of June 28.

The deal called for the Honduran Congress to decide whether Zelaya should return to power before presidential polls on November 29, but set no deadline for that vote.

Insulza called Friday for Congress to make the decision on Zelaya's return.

The November elections meanwhile were once again in jeopardy, with Zelaya supporters threatening a boycott. Foreign observers have said they will not take part until political stability is restored.

The European Union, the United States and multilateral agencies cut off vital foreign aid to protest the coup, and were supposed to restore it if the pact was fulfilled.

- The international community will have to see what measures - to take after the agreement faltered, Zelaya said Friday.

Many feared further social unrest after a heavy-handed crackdown by the de facto regime on protests by Zelaya supporters, including the media, in the past months.

This week a grenade detonated at a radio station seen as sympathetic to Micheletti, and two other grenade attacks were also reported.

Opposition presidential candidate Porfirio "Pepe" Lobo is leading in opinion polls to take over as president in the diplomatically-isolated nation in January.