DHAKA (AFP) - Bangladesh's ruling party and opposition held their first talks on Tuesday in a bid to defuse the country's election crisis, a special UN envoy said, calling it an "important moment" in the stalemate.

Some 74 people have died in clashes since October, when an 18-party opposition movement launched a wave of protests calling on Prime Minister Sheikh Hasina to resign before Jan 5 polls.

The opposition, led by Hasina's rival Khaleda Zia, has said it fears the premier will try to rig the vote in a country which for decades has been plagued by coups and political upheaval.

"Today represents an important moment in the current context. Representatives of both parties have met and engaged in a dialogue," Oscar Fernandez-Taranco, the UN assistant secretary for political affairs, told reporters.

The UN envoy did not elaborate on the dialogue, but speculation was rife that a deal between the ruling Awami League and the opposition Bangladesh Nationalist Party (BNP) was in the cards.

Last month Hasina spoke to Zia by telephone and asked her to begin a dialogue to end the deadlock.

Television reports said deputy chiefs of the two parties met at a private residence - their first such meeting since the crisis began - in the capital Dhaka, in the presence of Taranco.

"Both sides have agreed to continue their dialogue in a spirit of goodwill and compromise to work constructively together to decrease tension and bring confidence," the UN envoy said after the meeting.

The talks are likely to increase the chance that the BNP and its smaller Islamist allies will take part in the elections, after they announced last month that they would boycott the polls.

The opposition has said it will not take part in any contest under Hasina.

Local media said the UN special envoy would meet Hasina on Wednesday and ask the authorities to defer the election in an effort to ensure participation of the opposition parties.

Hasina's plan to go ahead with the polls without the BNP suffered a major blow last week when her key ally - the Jatiya Party, the third-largest political organisation in the country, led by ex-military dictator Hussain Muhammad Ershad - announced it would also boycott the vote.

On Monday, Ershad said seven senior officials from his party who had joined Hasina's interim cabinet, which would oversee the polls, had quit.

With the elections only four weeks away, the 18-party opposition alliance has stepped up a series of protests including a crippling transport blockade and nationwide strikes to force Hasina to step down.

The opposition on Monday extended a 72-hour nationwide blockade of roads, rails and waterways for another three days.

This year, Bangladesh has witnessed its worst political violence since independence, with clashes also between opposition protesters demanding a halt to war crime trials of their leaders and police that have left at least 150 people dead.