BEIRUT, Lebanon - Rival politicians resumed on Monday talks aimed at ending Lebanon's political crisis, with leaders warning failure to resolve contentious issues would damage an ailing economy and worsen divisions.

Political sources said chances were very slim the leaders would agree on two key issues: disarming Hizbollah guerrillas and the fate of the pro-Syrian president, while some progress was possible in bridging some other differences.

The "national dialogue conference", the largest top-level political gathering since the end of Lebanon's 1975-1990 civil war, was adjourned abruptly on March 7 after a row over fiery comments made by an anti-Syrian leader on a visit to Washington.

But the breathing space appeared to have done little to end sharp differences between pro- and anti- Syrian politicians despite warnings that failure could plunge the country deeper into political and economic crises.

"It must succeed and we should use all our capabilities to avoid failure... This conference presents a precious opportunity for national salvation," Parliament Speaker Nabih Berri, an ally of Syria who called the talks, told as-Safir newspaper.

Prime Minister Fouad Siniora, a member of the majority anti-Syrian coalition, warned the country's economy could not tolerate many more setbacks.

"The economy has suffered a lot and any delay will add to the problems...," Siniora said. "If we did not agree today we will agree in days, weeks or months, but every delay will increase the cost for Lebanon and the Lebanese."

Lebanon is grappling with a public debt of more than $36 billion (20.85 billion pounds)-- nearly double its gross domestic product. It is banking on an aid conference in Beirut later this year to ease the debt burden and kickstart the economy.

Security was tight around the parliament in central Beirut where the talks were being held.

The killing of ex-Prime Minister Rafik al-Hariri 13 months ago has plunged Lebanon into a political crisis. Mass protests blaming Syria for the murder forced Damascus to bow to international pressure and quit Lebanon two months later.

A wave of bombings and assassinations has since raised fears the country was sliding into chaos.

THORNY ISSUES

The fate of President Emile Lahoud is among the thorniest issues at the roundtable talks; he is under pressure from anti-Syrian politicians to resign but has vowed to see out his term, extended for three years in 2004 under Syrian pressure.

Even more contentious is a U.N. Security Council resolution demanding the pro-Syrian Hizbollah disarm. Some Lebanese believe the Shi'ite group should lay down its guns and stick to politics but others see it as legitimate armed resistance to Israel.

The talks appeared to be on the verge of collapse after anti-Syrian Druze leader Walid Jumblatt called from Washington for Hizbollah to be disarmed.

The comments prompted Hizbollah chief Sayyed Hassan Nasrallah to walk out of the talks in protest. But Nasrallah, along with Jumblatt and other top leaders, Christian and Muslim, returned to the talks on schedule.

Hizbollah's guerrilla attacks were instrumental in ending Israel's 22-year occupation of southern Lebanon in 2000.

Hizbollah says it has the right to keep its arms, partly to liberate the Shebaa Farms, an Israeli-occupied border territory.

The group says the area is Lebanese, but the U.N. maintains it is Syrian, unless Beirut and Damascus amend their border, and that the Israeli withdrawal from south Lebanon is complete.

Lebanese leaders are expected to agree on Lebanon's claim to the Shebaa Farms, which would go some way to legitimating Hizbollah's arms, but they remain split on whether the tiny strip should be liberated by force or through diplomacy. (Reuters)