Zimbabwean President Robert Mugabe said Wednesday he was "very hopeful" that talks to rescue a power-sharing deal he signed a month ago with his arch-rival Morgan Tsvangirai would be concluded soon.

Mugabe was speaking on his arrival at a hotel in Harare for a second day of talks with Movement for Democratic Change (MDC) leader Tsvangirai and MDC faction leader Arthur Mutambara brokered by former South African president Thabo Mbeki

Mbeki, southern Africa's mediator in Zimbabwe, returned to the country amid signs that the September 15 unity agreement signed by the three leaders at his urging is on the rocks.

Mugabe and Tsvangirai, who is supposed to become prime minister in a government of national unity, are at loggerheads over the distribution of key ministries between their parties.

Mugabe is under pressure from hardliners in his party not to hand significant power to the MDC.

On the MDC side, Tsvangirai is being pressurized not to accept a junior role, given that the MDC won the most votes in the last parliamentary elections.

The tensions deepened when Mugabe on Friday unilaterally awarded control of the defence and home affairs ministries, among others, to his Zanu-PF party.

These portfolios give him control of the army and the police, both of which he has used to subdue the MDC and its supporters.

Mugabe's move prompted Tsvangirai to threaten to walk away from the deal.

Despite being ousted as president of South Africa last month by his party, Mbeki has been mandated to continue as mediator.

Zimbabweans are counting on the speedy implementation of the power-sharing deal to help unlock much-needed aid and investment.

A decade of increasingly disastrous rule by Mugabe, 84, has left Zimbabwe inching closer to the status of failed state.

Over 2 million Zimbabweans require food aid - a figure expected to reach 5 million, or close to half the population by January - and inflation is running at over 230 million per cent, one of the highest on record.