SAN SALVADOR -- Reports of a secret U.N. cease-fire proposal that would create separate government- and rebel-controlled zones in El Salvador have upset officials of the U.S.-backed government here, while the alleged plan has gained support among the rebels, according to diplomats and sources on both sides of the conflict.

But a U.N. envoy yesterday denied the existence of any U.N. document proposing such zones. "No such document exists," U.N. peace envoy Alvaro de Soto said.

In an abrupt change during talks earlier this month in Mexico, top rebel commander Joaquin Villalobos offered to sign a cease-fire agreement based on the purported U.N. proposal, the sources said. U.S. officials regard Villalobos as the most hard-line leader in the five-group Farabundo Marti National Liberation Front (FMLN).

Until now, the nine-month-old U.N.-mediated talks have deadlocked over rebel demands for military and other reforms before any cessation of hostilities. The government and the United States, which has backed El Salvador during the 11-year-old civil war, have sought a formal cease-fire before discussing other issues.

The government, diplomats said, declined to sign any cease-fire pact that would recognize de facto rebel control of territory. It also is backtracking on key clauses of an earlier U.N.-sponsored proposal for military reforms, a top rebel demand, according to sources on both sides of the conflict.