US Secretary of State, Hillary Clinton says Costa Rican President, Oscar Arias, will serve as international mediator in the Honduran political crisis.

U.S. Secretary of State Hillary Clinton speaks during a news conference after meeting privately with ousted Honduran President Manuel Zelaya at State Department in Washington on Tuesday July 7, 2009.[Jose Luis Magana/CCTV/AP Photo]

Meanwhile, Honduras' interim government has given hints of a possible solution to the crisis. It has expressed the first signs of flexibility about the possible return of ousted Honduran president Manuel Zelaya.

Clinton made the announcement after meeting privately with Zelaya in Washington on Tuesday.

Hillary Clinton, US Secretary of State, said, "The United States supports the restoration of the democratic constitutional order in Honduras. We continue to support regional efforts through the OAS to bring about a peaceful resolution that is consistent with the terms of the Inter-American Democratic Charter."

Clinton noted that the Costa Rican President won the Nobel Peace Prize in 1987 for helping broker an end to Central America's civil wars.

Speaking to reporters after the meeting, Zelaya said he was pleased with the appointment of Arias.

Manuel Zelaya, Ousted Honduran President, said, "We want to show our recognition to all the countries, all the organizations, which have clearly expressed their condemnation of this matter. They have recognized the only legitimate government in Honduras, the one elected by the people's will."

The man installed by the June 28th coup, Roberto Micheletti, also applauded the announcement that Arias had agreed to mediate efforts to end the standoff.

It's believed one option being considered would be to forge a compromise. The aim would be to allow Zelaya to return and serve out his remaining six months in office with limited powers.

Meanwhile in the Honduran capital of Tegucigalpa, thousands of pro Zelaya demonstrators marched peacefully on Tuesday while an equally large number of Micheletti backers gathered in the city center in support of the coup.

(CCTV July 8, 2009)