HARARE (Reuters) - Zimbabwe's political parties failed to meet a Monday deadline set by South African President Jacob Zuma to resolve a power-sharing dispute that threatens to tear apart the country's coalition, a cabinet minister said.

President Robert Mugabe formed a unity government last year with Movement for Democratic Change (MDC) leader Morgan Tsvangirai, now prime minister, but the union is fraught with disagreements over how to share power.

Zuma, who is mediating in Zimbabwe, held talks with the two rival leaders early this month and said Mugabe's ZANU-PF and Tsvangirai's MDC had agreed a package of measures to rescue the unity government.

Zuma then set a March 29 deadline for ZANU-PF and MDC negotiators to conclude the talks, after which they were to present a report to him by Wednesday.

"We met the whole of today and we will meet again tomorrow after cabinet meeting. The negotiations were not concluded," Justice Minister Patrick Chinamasa, a ZANU-PF negotiator said.

A source privy to the talks said it was "very unlikely" agreement on the sticking points would be reached and that the regional Southern African Development troika chairman, Mozambican President Armando Guebuza, would be forced to call a meeting to try end the dispute.

The MDC wants its treasurer-general Roy Bennett sworn in as deputy agriculture minister, appointment of five of its senior officials to positions of provincial governors and for Mugabe to sack the attorney general and central bank governor.

Mugabe last week vowed not to cede any ground to the MDC until sanctions imposed on ZANU-PF members and a general freeze on financial aid for Zimbabwe by the West are removed.

The 86-year-old says the MDC should lobby the West to remove the sanctions and stop what ZANU-PF calls "pirate radio stations" from broadcasting into Zimbabwe.