Zimbabwe's main opposition party could sign an agreement as early as Monday to begin substantive talks with President Robert Mugabe's party on ending a political impasse that has worsened the country's already severe economic crisis, opposition officials say.
The apparent breakthrough came after South African President Thabo Mbeki proposed forming a team drawn from African regional bodies and the United Nations to help him mediate the worsening crisis in neighbouring Zimbabwe.
A statement seen by Reuters said Mr Mbeki had proposed during a meeting on Friday to create a team representing the African Union, the Southern African Development Community and the United Nations, with which he would liaise in efforts to foster dialogue between Zimbabwe's warring parties.
The Movement for Democratic Change has refused to recognise Mr Mugabe's overwhelming victory in a vote held on 27 June after MDC candidate Morgan Tsvangirai pulled out, citing violence by ruling party militia.
In a public letter to his supporters, Mr Tsvangirai - who has previously demanded that an African Union envoy join the mediation before his MDC will agree to more substantial talks - said setting up the new team was a positive step.
"We welcome (the) appointment of a reference group of eminent Africans who will work with President Mbeki and the main parties in Zimbabwe to find a peaceful negotiated solution to the Zimbabwean crisis," he said.
Opposition officials said Mr Tsvangirai indicated to African Union commission Chairman Jean Ping on Saturday that he would be ready to sign a draft memorandum of understanding in the next few days.
The memorandum sets out guidelines on substantive negotiations between Mr Mugabe's Zanu-PF and the opposition, which Mr Tsvangirai has so far refused to sign.
Mr Mbeki has been mediating preliminary talks between Zanu-PF and the MDC to resolve the stand-off but critics say he has not made progress and has favoured Mr Mugabe with his soft approach.
Mr Tsvangirai won the first round presidential vote on 29 March but official figures showed he failed to get the absolute majority needed to avoid a second ballot. The MDC insists Tsvangirai won outright the first time.
100 billion dollar note issued
The resulting impasse has dampened hopes of halting an economic meltdown that has forced the central bank to introduce a 100 billion Zimbabwe dollar note - enough to buy two loaves of bread - in a desperate fight against hyperinflation.
Zimbabweans are suffering chronic shortages of meat, maize, fuel and other basic goods because of the collapse of the once prosperous economy, which the MDC and other critics blame on Mr Mugabe's seizure of white-owned farms and other policies.
Central bank Governor Gideon Gono said on Wednesday inflation had surpassed 2.2 million percent, but some economists say it is much higher.
Mr Gono said the Reserve Bank of Zimbabwe would introduce Z$100 billion special agro-cheques (notes) to help consumers forced to carry large wads of cash even for simple transactions.
The Zimbabwe dollar, officially pegged at 30,000 to the US dollar before exchange rules were relaxed recently, now trades at about 800 million to the US unit.