UPDATE 1-OAS to deliver ultimatum to Honduras: Insulza

ASHINGTON, July 1 (Reuters) - Members of the Organization of American States have decided to give the interim government in Honduras 72 hours to reinstate democracy or face possible suspension, OAS chief Jose Miguel Insulza said on Wednesday.

"Basically the decision is to condemn, very clearly, the military coup" that ousted President Manuel Zelaya on Sunday, Insulza told reporters after hours of talks at the OAS headquarters.

He said the resolution being finished would demand Zelaya's immediate reinstatement as Honduran president and charge himself, Insulza, with taking the "diplomatic and political steps necessary" to try and restore democracy in Honduras.


"If within 72 hours the reinstatement doesn't happen, the assembly ... will meet again to suspend Honduras," Insulza said. He said the 72 hours would expire sometime on Saturday.

Zelaya vowed on Tuesday to return to Honduras flanked by foreign leaders to serve out his term, defying a warning from the government that ousted him that he faces immediate arrest.

Addressing the United Nations before traveling to Washington to meet OAS leaders, Zelaya said the Argentine and Ecuadorean presidents and the U.N. General Assembly and OAS chiefs would accompany him back to Honduras on Thursday.

Insulza told reporters that he was willing to go to Honduras with Zelaya if Zelaya wished it. But the OAS chief said he did not plan to meet members of a delegation that the interim Honduran government said it was sending to Washington on Wednesday.

The OAS began a special session late on Tuesday that continued into Wednesday to debate its role in the Honduran situation. (Reporting by Susan Cornwell; Editing by Eric Walsh)