Arias says "we have to make an effort to bring the positions closer."
Ousted President Manuel Zelaya had threatened to declare negotiations a failure if no deal was reached by midnight and return to Honduras on his own. But his representative says they will give the talks at least one more day.
Zelaya negotiator Rixi Moncada says her side will extend the talks after the government of interim president Roberto Micheletti asked for more time to study Arias' proposal.
Micheletti had previously rejected those proposals.
A negotiator for ousted President Manuel Zelaya had said his side has accepted in principle the points proposed by a mediator to end the Honduras coup crisis.
But negotiator Enrique Flores says the interim government of Roberto Micheletti has rejected the central point of allowing Zelaya to be reinstated, leaving the talks stalemated.
Flores says "in principle we accept all the points, to later discuss them in detail."
But he says the Honduras' de facto leaders have shown no willingness to accept Zelaya's return, adding that if there is no progress "we will declare the talks a failure."
The mediator of Saturday's talks proposed that Zelaya be allowed to return to Honduras to serve out the rest of his term and lead a national unity government.