Crisis talks between Fiji's elected leader and its defiant military commander broke Wednesday without an agreement on averting a coup, but the prime minister said "substantial" progress had been made on issues that divided them.

Prime Minister Laisenia Qarase and Commodore Frank Bainimarama discussed the military's repeated threats to oust the government over a range of complaints for about two hours at a closed-door meeting in the New Zealand capital.

The first face-to-face talks between the men in 10 months was arranged through urgent high-level diplomacy as Australia and New Zealand — the South Pacific regional powers — expressed concern that Fiji's fourth coup in 19 years was about to happen.

"We made substantial progress on the requests and demands from the military," Qarase told a Fiji radio station shortly after the meeting, declining to give details.

He said there could be further consultations between the two men, who left the meeting separately and were each expected to return to Fiji later Wednesday.

New Zealand Foreign Minister Winston Peters, who hosted the talks, said the two had agreed to a "specific timetable" to continue working on their differences.

Asked if a coup was still possible, Winston told reporters, "I am an optimist, we are doing our best to see if we can work this through. There is further work to do and we are doing it."

The two men have been feuding for almost two years, with Bainimarama accusing the government of corruption and threatening to force it out if Qarase doesn't accede to a range of demands. Qarase tried to have Bainimarama replaced last month, but failed after senior officers rallied around the commander.

Bainimarama last week gave the government a deadline for action of next Monday.

Bainimarama didn't immediately comment on the talks. Beforehand, he said there would be no compromise.

"It's very simple. He comes with a 'yes' or a 'no' to our demands, full stop," Bainimarama told New Zealand's Radio Tarana.

Qarase said early Wednesday he hoped Bainimarama would change his stance, but that some demands — such as dropping police charges against Bainimarama and other senior officers — would mean "the military usurping the powers of other government agencies, and that's a threat to our democracy."

New Zealand Prime Minister Helen Clark said before the meeting the talks would succeed only if both sides gave ground.

On Tuesday, armed soldiers patrolled the capital, Suva, for a second day and more military reservists were called up to bases around the nation. Some 3,000 reservists are due in camp by later in the week.

Suva was calm Wednesday, with no sign of troops.

In New York, U.N. Secretary-General Kofi Annan said in a statement he was "alarmed by the continued possibility of a military coup d'etat against the legitimate government" of Fiji.

"Further prolongation of the crisis may damage Fiji's international standing ... as an important contributor to U.N. peacekeeping operations," Annan said, urging a peaceful resolution to the crisis.

Bainimarama has threatened in recent weeks to "clean up" Qarase's government if it does not accede to demands by next week, including that police drop all investigations into alleged wrongdoing by senior military officers and fire the police chief.

The military leader has also been an outspoken opponent of two pieces of government legislation: one offering amnesty to the plotters of a 2000 coup, and another that hands coastal land ownership in the multiethnic country to indigenous Fijians.