"The army is inside the presidential [compound]. It is not clear what they are going to do but they have not been directly confrontational so far."
Zelaya was forced from power by the military on Sunday, on the same day that he tried to push ahead with a referendum on changes to the constitution.
The military, legislature and courts had already declared Zelaya's move to hold the non-binding public vote illegal.
They each said that Zelaya was looking to extend his rule by changing the national charter to allow himself to run for a third term in office.
Zelaya, whose four-year term was set to expire in January, had dismissed the claims, saying that constitutional changes were necessary to improve the lives of Honduras' poor.
While the army has not moved violently against the protesters massed outside the presidential palace, soldiers have on occasion moved towards the fence in the direction of the demonstrators, fuelling tension, Sanchez reported.
A two-day curfew came into effect on Sunday, but has been widely ignored.
|Zelaya was elected for a non-renewable
four-year term in 2006 [File: AFP]
The removal of Zelaya from the presidency has been denounced by countries allied to the sacked left-wing leader.
Members of the Bolivarian Alternative for the Americas (Alba) on Monday, which includes Venezuela and Bolivia, said they would withdraw their ambassadors from Honduras.
Barack Obama, the US president, on Monday called the Honduran military's removal of Zelaya "illegal", and said that he is still the country's president.
Zelaya was taken by soldiers from his home in his pyjamas on Sunday and sent to Costa Rica after the military moved aginst him.
As Micheletti, from the same Liberal party as Zelaya, was sworn in hours after the military coup, he promised to govern with "transparency and honesty" and "work tirelessly to restore peace and tranquillity that we have lost".
He said Zelaya was not ousted through a coup but through a legal process.
"I came to the presidency not by a coup d'etat but by a completely legal process as set out in our laws," Micheletti said after being sworn in by congress.
"What we have done here is an act of democracy, because our army has complied with the order of the court, prosecutors and judges," Micheletti said, winning loud applause from legislators.
But Zelaya said he had been a "victim of kidnapping" when Honduran soldiers raided his home earlier in the day.
"They came to my house in the early hours of the morning and firing guns, they broke the doors with bayonets and threatened to shoot me," Zelaya told Venezuela's Telesur television station after being taken by troops to Costa Rica.
Calling for "peaceful resistance", he said he did not "think that the whole army supported this interruption of the democratic system by capturing a president elected by the people".