* Ravalomanana refuses to attend Geneva talks

* Opposition say participation in talks is a duty

(Adds Opposition, details, background)

By Richard Lough

ANTANANARIVO, Oct 16 (Reuters) - Talks between Madagascar's leaders on final details of a power-sharing deal, which were to have been held in Geneva this weekend, have been cancelled, the United Nations said on Friday.

Toppled leader Marc Ravalomanana has rejected any deal that sees Andry Rajoelina retain the presidency on the Indian Ocean island increasingly eyed by foreign investors for its oil and mineral resources.

"Marc Ravalomanana told us last night that he would not travel to Geneva and that he wished for the meeting to take place in Africa," U.N. envoy to the Indian Ocean island, Tiebile Drame, told reporters.

Andry Rajoelina, 35, ousted Ravalomanana in a March coup after weeks of violent street protests.

Ravalomanana opposed a re-shuffle of key posts earlier this month, endorsed by the international community, which saw Andry Rajoelina retain the presidency and a relatively unknown social anthropology professor picked as prime minister.

Drame said it was imperative any final deal remained consensual. He said the U.N. and African Union (AU) would work on a new date and location agreeable to all the main protagonists who include former presidents Didier Ratsiraka and Albert Zafy.

Emmanuel Rakotovinahy, a close ally of Zafy and the man nominated as vice president by the four political movements, accused Ravalomanana of holding 20 million people hostage.

"It is a duty to participate. To say 'I block the country' is almost a criminal act," Rakotovinahy told Reuters.

FURTHER COMPROMISE

The country's power-brokers have been deadlocked on who should lead Madagascar since negotiations in Mozambique in August paved the way for a consensus government.

Ravalomanana, who is exiled in South Africa, has said endorsing Rajoelina as head of state would legitimise the military-backed power-grab.

While some analysts have said his hard-line stance is leaving him isolated, Drame said the international community had no wish to hold talks with a key protagonist absent.

It had been hoped the political rivals would pick new ministers and name the heads of interim institutions including the two parliamentary chambers.

"We call on them to make further compromises so the transitional government can start its work as soon as possible," said Drame.

The three opposition movements said they were agreed in principle to talks in Africa.

The turmoil has wearied local people because the economy is suffering, urban unemployment is up and food prices are rising.

"Maybe he has a point when he says the power grab was unconstitutional. But if we get a deal we'll have elections next year anyway," said taxi-driver Hery Razakarivony.

Rajoelina has called for elections by next April. (Editing by Giles Elgood)

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