Mediators from the West African regional bloc ECOWAS on Thursday gave Guinea Bissau a weekend deadline to name a prime minister and end a political deadlock dragging since 2015.
More than three months after legislative elections in March, President Jose Mario Vaz has refused to name his estranged deputy Domingos Simoes Pereira prime minister.
It had been hoped that the March 10 vote would draw a line under a crisis that erupted in August 2015 when Vaz sacked Pereira, his then prime minister.
Both men are from the ruling African Party for the Independence of Guinea Bissau and Cape Verde (PAIGC) party.
The March vote saw the PAIGC and its allies control 54 of parliament's 102 seats but lawmakers proposed Pereira, the party leader, as prime minister, a move rejected by Vaz.
Pereira has refused to go quietly and repeatedly led protests demanding his reinstatement to the post.
The Economic Community of West African States has sent a mission to try and resolve the deadlock.
"The mission insists that all the political players ... choose before June 23 a prime minister proposed by the majority party and the formation of a new government," the head of the ECOWAS commission, Jean-Claude Brou, said on Thursday.
Vaz's five-year rule as president ends on that date.
The ECOWAS mission also noted with "bitterness" the lack of progress in resolving the deadlock and said it would "propose sanctions on all those responsible for the logjam" at the grouping's summit in the Nigerian capital Abuja at the end of this month.
In February last year, ECOWAS imposed travel restrictions and froze the bank accounts of 19 people in Guinea Bissau it deemed responsible for the crisis but the move did not have an impact.