No deal for Japan PM with main opposition party

TOKYO, Nov 22 (Reuters) The head of Japan's main opposition party today rejected a request from the prime minister for policy consultations to resolve a deadlock that has halted a naval mission in support of US-led operations in Afghanistan.

Prime Minister Yasuo Fukuda's talks with Democratic Party leader Ichiro Ozawa were the first since they met on November 2 in an abortive attempt to forge a grand coalition to cope with a divided parliament.

''Prime Minister Fukuda urged us to agree to create a framework to discuss various issues and to reach agreements,'' Ozawa told a news conference, adding that Fukuda mentioned pensions and the naval mission as two key topics.

''I replied that our stance is that it is fine to debate in parliamentary committees, but we can't agree to discussions between the (ruling) Liberal Democratic Party and the Democratic Party outside parliament or to talks limited to certain parties.'' The standoff in parliament, where the Democrats and smaller opposition parties control the upper house and can delay legislation, has prevented the government from enacting any major laws since Fukuda took office in September following his predecessor's sudden resignation.

Ozawa also said he had rejected repeated requests from Fukuda to agree to restart the mission in the Indian Ocean, where Japan's navy had for six years been refueling US and other vessels patrolling for drug smugglers and suspected terrorists.

Fukuda has promised US President George Bush that he would do all he could to restart the mission, halted on November 1 when an enabling law expired.

But Ozawa objects to the naval operation because he says it lacks a UN mandate and violates Japan's pacifist constitution.

Some political analysts said Fukuda and the LDP may have wanted to show openness to dialogue with the opposition as a prelude to taking a tougher stance later.

''There is no system or procedure to make laws in this 'twisted' parliament, and politicians are struggling,'' said Toru Umemoto, chief forex strategist at Barclays Capital.

Parliament's session is set to end on December 15 but the ruling bloc will need to extend that, perhaps into January, if it wants to use its two-thirds majority in the lower house to override an upper house rejection of a bill to resume the naval mission.

Its efforts are being complicated by opposition probing of a defence ministry scandal to which Finance Minister Fukushiro Nukaga has been linked. Nukaga has denied any wrongdoing.

For his part, Ozawa -- a former LDP heavyweight who left the party in 1993 -- has been struggling to explain to the public a confusing series of events that followed his talks with Fukuda earlier this month.

Democratic Party executives swiftly rejected a proposal at that time for a grand coalition, prompting Ozawa to tender his resignation. But he then agreed to stay on after party lawmakers, fearing Ozawa might defect, begged him to stay.

REUTERS PD AS1441