Zedillo Seeks Agreement to Share Power : Mexico: An accord with the two largest opposition parties could transform nation’s politics, defuse crises.

President Ernesto Zedillo sought to bolster his image as a democrat and peacemaker Monday, working to finalize a major power-sharing agreement with the political opposition just hours after his top aide met for the first time with guerrilla leaders in the Chiapas jungle.

Aides to the 42-year-old president, still reeling from a financial crisis that has tarnished his image just six weeks into his term, said the administration hopes to reach an agreement with the two largest opposition parties this week that will transform Mexican politics and defuse several local crises.

Mexico’s financial markets showed little response to Zedillo’s peacemaking efforts, with the stock market gaining just 1.19% and the peso falling slightly to 5.48 to the U.S. dollar at the close of trading Monday.

But the government and the Zapatista National Liberation Army both said that Sunday’s meeting between the rebel leader, Subcommander Marcos, and Interior Secretary Esteban Moctezuma Barragan was a major step toward ending the government’s year-old conflict with the guerrillas. They cautioned, however, that it was only the beginning of a long negotiation process.

As Moctezuma worked through a Roman Catholic Church mediator to schedule future meetings with the rebel commander, the president met privately with leaders of his Institutional Revolutionary Party to put the finishing touches on a more immediate package--a sweeping accord for electoral reform that Zedillo’s aides said he hopes to sign with opposition leaders this week.

After 65 years of continuous and often authoritarian rule, the PRI is willing, the president has indicated, to give up many of its built-in electoral advantages in an agreement for “democratic transition” with the nation’s two largest opposition groups, the Democratic Revolutionary Party (PRD) and the National Action Party (PAN).

Details of the accord were not available Monday, and the reform package will have to be approved by the Congress. But Zedillo flagged many of the proposed reforms during a historic meeting Friday with leaders of the left-leaning PRD in the capital.

Calling such reform “urgent,” Zedillo said it is imperative to “rid ourselves of the ghost of post-electoral conflict.” Referring to those conflicts, which are threatening to ignite social unrest throughout the south, Zedillo expressed his willingness to compromise.

“Our reality now is that if the power is not ceded and shared, what will result is a very grave and very widespread crisis,” the president declared.

The PRD is leading protest movements in the states of Tabasco and Veracruz as well as Chiapas, where its unsuccessful gubernatorial candidate, Amado Avendano, created a “government in rebellion.” Avendano joined forces with the Zapatistas last month in a series of peaceful uprisings against the elected state government that helped trigger Mexico’s economic crisis.

Opposition leaders indicated that the pending democratic-reform package is likely to defuse their protests not only in Chiapas but also in the oil-rich neighboring states of Tabasco and Veracruz. And financial and political analysts said the signing of the accord will further boost Mexico’s stock market.

Zedillo’s latest moves came after a weekend blizzard of criticism of his ability to govern--most of it focusing on Zedillo’s twin problems of credibility and image.

In a blistering column Sunday in the independent newspaper Reforma, a top Mexican analyst warned that Zedillo must prove within the next 48 hours that he can consolidate and strengthen his administration, or risk more financial and political chaos. And the influential weekly magazine Proceso hit the streets Monday declaring on the cover, “The president can’t.”

“Zedillo has serious image problems both in Mexico and outside,” declared analyst Denise Dresser in a column entitled, “Zedillo: Get Up and Walk!” “This is not the time to reduce and modernize the presidency. Zedillo must be omnipresent, on the radio, on television, in the length and breadth of the nation.”

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More on Chiapas (Southland Edition, 10)

* Reprints of “The Roots of Rebellion,” the Los Angeles Times Magazine recounting of a journey on the rebels’ road, are available from Times on Demand. Call 808-8463, press *8630 and select option 1. Order Item No. 6027. $2.95.

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