Lucia Newman, Al Jazeera's Latin America editor, said that several scenarios to solve the crisis had been proposed by OAS member states.
"One of them is that this de facto government, as the OAS calls it, would issue a blanket amnesty that would annul the arrest order for Zelaya," she reported from the capital, Tegucigalpa.
"In exchange, elections [currently scheduled for January] would be brought forward. But the deposed president would have to be reinstated [pending the election's outcome]. I understand that this proposal was put forward by Argentina."
However, the military-backed interim government and Roberto Micheletti, the interim president, have said that while they will consider bringing forward the elections, they are not willing to reinstate Zelaya for any length of time.
A large demonstration in support of the interim government went ahead in Tegucigalpa as Insluza arrived in the country.
But supporters of Zelaya say that they have been prevented from gathering in the city by security forces.
"The pro-Micheletti demonstration is huge. Pro-coup supporters have been bussed in from all over the country, we understand," Newman reported.
"But on the other hand, those [pro-Zelaya supporters] who wanted to demonstrate in front of the head of the OAS have been kept away; their buses have not been allowed to enter the capital."
'No government talks'
Insulza has already said he will not talk to members of the military-backed interim government as his organisation does not recognise it.
"We are not going to Honduras to negotiate, we are going to Honduras to ask them to change what they have been doing now, and find ways in which we can return to normalcy," he said before his trip.
Newman said that the current crisis is the "biggest challenge that the OAS has ever had to face".
"There is absolute consensus in the international community that they have to use their diplomatic might to reverse this coup d'etat. There is consensus that this kind of thing can not happen, and should not happen," she said.
Zelaya has vowed to return to Honduras on Saturday, despite warnings he will be arrested.
He has said it was the responsibility of the international community to ensure he was reinstated.
At a news conference in Panama City, Zelaya urged his supporters to keep demonstrating.
"I call on the people to keep up the banners. The street is ours. They've taken the institutions away from us, but the street belongs to the people," he said.