TEGUCIGALPA: Honduran troops surrounded the Brazilian embassy where ousted President Manuel Zelaya was holed up with dwindling supplies and a few hundred supporters, diplomats and journalists.

Soldiers earlier fired tear gas and wielded truncheons to disperse around 4,000 pro-Zelaya demonstrators who had camped out overnight around the embassy to protect the man they see as the rightful leader of their country.

Electricity, water and telephone lines to the Brazilian embassy compound in the center of Tegucigalpa were all cut off as the de facto leadership tried to put the squeeze on Zelaya and force him out.

There were also reports of a clampdown on Zelaya's supporters, with human rights organizations in Honduras and elsewhere saying two demonstrators had been killed, others injured and hundreds arrested.

The leader of an indigenous rights organization, speaking to Cuban television by telephone, described violence at the embassy compound.

"These fascists have dared to surround the embassy of Brazil, have beaten people, they have killed two comrades and tortured people," said Bertha Caceres of the Civil Council of Popular and Indigenous Organizations of Honduras.

Tirza Flores, a member of the group Judges for Democracy, described a "situation of total chaos" and said police were making "mass arrests."

Four protesters were also said to have been shot and wounded in the skirmishes around the embassy.

The de facto government has closed the Central American country's airports as it seeks to head off pro-Zelaya protests, and announced that a curfew would be extended until Wednesday morning local time.

Roberto Micheletti, the interim leader, showed no signs of yielding, lashing out against pressure from the United States and other governments for a negotiated resolution to the crisis and demanding that Brazil either give Zelaya refugee status or hand him over.

"He has been lying to the whole world and particularly Hondurans," Micheletti told Colombian radio Tuesday, saying Zelaya had only been deposed because he tried to violate the constitution.

But his government denied that it planned to raid the embassy and seize Zelaya by force.

"We have not considered, nor will there be, a raid on the embassy to capture Mr Manuel Zelaya," said Martha Lorena Alvarado, a senior aide for the Micheletti government.

As the stand-off looked set to enter a third day, supplies for an estimated 300 Brazilian diplomats, Zelaya supporters and journalists trapped inside were running low.

"We have no food here. There are about 10 small children in here who have had nothing to eat. We're in a really bad way," one Zelaya supporter said.

The United States pledged to do what it could to help via its embassy in Tegucigalpa.

"It's a very sensitive situation there on the ground, and I don't want to get into the details of what kind of assistance we're discussing," State Department spokesman Ian Kelly told journalists in Washington.

Zelaya made his surprise return to Honduras on Monday, three months after being ousted in a military-backed coup, prompting the tense stand-off that has coincided with world leaders gathering for the UN General Assembly.

In New York, Brazilian President Luiz Inacio Lula da Silva described the country as "in a state of siege" and pledged his support to Zelaya, defying calls to give him up.

Lula said he had spoken to Zelaya by telephone on Monday and urged him to "be very careful not to allow any pretext for the coup plotters to resort to violence."

Zelaya told AFP Tuesday that he had spoken with police and soldiers the day before to "seek a way out of the crisis," accusing his rivals of trying to further isolate Honduras and preventing access to international negotiators.

"Fighting for democracy shouldn't be a crime. I think we have to seek to come together directly in order to achieve peace," he told an AFP reporter inside the embassy.

In New York on Monday, US Secretary of State Hillary Clinton said now that Zelaya was back in Honduras, "it would be opportune to restore him to his position under appropriate circumstances."

Democratically elected Zelaya, a rancher, veered to the left after he took office and alienated some by aligning himself with Venezuelan President Hugo Chavez.

Micheletti has said he will step aside after presidential elections on November 29. Zelaya is constitutionally barred from standing for a second term.

Zelaya appeared Monday on the Brazilian embassy balcony in his trademark cowboy hat and issued a rallying cry to supporters.

"Nobody is going to grab me sleeping again, and my position is fatherland, restoration or death. They thought they were going to stop me at the border, but here I am alive and kicking."