Honduran President Manuel Zelaya, left, is welcomed by Venezuelan President Hugo Chavez, right, after his arrival at Managua Airport in Nicaragua on Monday. (Miraflores Palace/Reuters)

Failing to restore ousted Honduran leader Manuel Zelaya to power would set a "terrible precedent," President Barack Obama said Monday in Washington, amid growing protests over a weekend military coup in the Latin American country.

Speaking after a meeting in the Oval Office with Colombian President Alvaro Uribe, Obama told reporters the Honduran military's takeover of the presidential palace and decision to banish the democratically elected president from the country was "not legal."

The U.S. will work with other nations and international entities to resolve the matter peacefully and "stand on the side of democracy," Obama said.

In Tegucigalpa, the Honduran capital, on Monday, troops in riot gear and armoured military vehicles surrounded the presidential palace, as a demonstration against the coup grew into the thousands during the day.

At one point, police fired several canisters of tear gas to keep the crowd back from the building. Reporters saw at least five people detained as protesters blocked streets with downed trees and burned tires and other debris.

It came as leaders from around Latin America met in Nicaragua Monday to try to resolve the situation. The European Union offered to help start talks between the two sides.

There is a growing rift between the outside world, which wants the return of Zelaya, and the country's Congress, courts and military, which back successor Roberto Micheletti.

Hustled aboard plane to Costa Rica

Zelaya was seized by soldiers early Sunday and hustled aboard a plane to Costa Rica. Hours later, the Honduran Congress voted to replace him with Micheletti, the congressional president.

Worldwide efforts to return Zelaya to power grew Monday, led by Venezuelan President Hugo Chavez, who vowed to overthrow Micheletti.

American diplomats were working to ensure Zelaya's safe return. EU envoys met with their Central American counterparts in Brussels to discuss the coup and what implications it could have on free trade negotiations between the EU and Honduras, Guatemala, El Salvador, Nicaragua, Costa Rica and Panama.

UN Secretary General Ban Ki-moon condemned the coup, as did the Rio Group, which comprises 23 nations from the hemisphere, while Taiwanese President Ma Ying-jeou cancelled a planned visit to Honduras.

Supporters of Honduras' President Manuel Zelaya sing the national anthem outside the presidential house in Tegucigalpa, Honduras on Monday. (Oswaldo Rivas/Reuters)

However, Micheletti rejected any outside interference and declared a two-night curfew.

The army acted on orders from the courts "to defend respect for the law and the principles of democracy," said Micheletti. He threatened to jail Zelaya and put him on trial if he returned.

Micheletti also hit back at detractors, saying "nobody, not Barack Obama and much less Hugo Chavez, has any right to threaten this country."

Zelaya was expelled from Honduras just hours before a rogue referendum he had called, defying the courts and Congress.

Opponents feared Zelaya would use the referendum to remain in power after his term ends on Jan. 27, 2010. The Honduran constitution limits presidents to a single four-year term.

With files from The Associated Press