The City of Ottawa has rejected a federal mediator's middle-ground proposal, which the city's transit union was prepared to accept; a move that puts a halt to the possibility of ending a three-day transit strike that has crippled the nation's capital.

The president of the Amalgamated Transit Union, who represents more than 2,100 transit workers, says the deal would have put OC Transpo workers back on the job within a 24-hour period.

"(The mediator) has spent time with both sides, has listened carefully to the issues that remain in dispute, and has suggested a middle-ground position that we are prepared to accept today and end the labour dispute," Andr� Cornellier said in a prepared statement.

"If the mayor is not willing to listen to the federal mediator, then it is his decision that the residents of this city should suffer through a long and difficult dispute."

The mayor, however, says the deal recommended taking block-booking scheduling off the table, and is one of many suggestions put forward by several mediators working on the case.

O'Brien puts final offer back on the table

Instead, Mayor Larry O'Brien wants the transit union to let its membership vote on the city's final offer, which the union's executive rejected earlier this week.

The offer included a seven per cent wage increase over three years, a one-time payment of $2,000 to all ATU members, two additional sick days, and would allow OC Transpo management to take over driver scheduling from the union.

O'Brien told reporters Friday if the membership voted 51 per cent in favour of the deal, he would push it through council to end the dispute as soon as possible.

College students late for exams

On the streets of Ottawa, the strike continued to cause headaches across the city.

Striking OC Transpo workers caused delays near Algonquin College at a Park and Ride station at Woodroffe Avenue and Baseline Road Friday, frustrating students who showed up to write their exams.

"They might not let me write my exam," said college student Jen Tan, who was stopped at the picket line 10 minutes before her exam was scheduled to start.

"Three minutes each car, we'll let you go through. We're here, it's our right. We're fighting for our right. When you come in the real world of working people, you'll see how it is," one union member told Tan as she pleaded to pass the picket line.

"I care about you guys, but you need to let us in," Tan replied.

Hour-long delays at some city buildings

Meanwhile, a few blocks away, commuters waited up to an hour to get into a municipal building on Constellation Drive.

"I think they have the right to strike. I feel I'm an essential service here too, and I need to get to work," said a social worker, who was delayed by the striking transit workers.

"I started from my apartment one hour earlier. Still, I'm here -- I cannot move," said another commuter.

Pickets come down at Ottawa City Hall

Traffic congestion in the downtown core eased up a bit Friday after OC Transpo workers agreed not to picket outside Ottawa City Hall.

A large group of striking workers helped create traffic gridlock in and around Elgin Street and Laurier Avenue during the first two days of the strike.

Although the city was planning to seek an injunction against demonstrations at Ottawa City Hall, the Amalgamated Transit Union decided to pull the pickets on their own.

Premier urges both sides to talk

Ontario Premier Dalton McGuinty also lent his voice to the dispute Friday, asking both sides to return to the bargaining table.

"I've put very heavy pressure on both sides to come together to hammer out a deal. Go back to the bargaining table, and we're prepared to put in a provincial mediator if that was to help to bring the sides together and keep them together to work out a deal," McGuinty said Friday in an exclusive interview with CTV Ottawa.

Union sorry for disruptions

Cornellier also had a message for the public on Friday, saying his membership regrets that transit users have had to trudge through snow and battle heavy traffic during the strike. Instead, Cornellier cast the blame on the city's mayor, who he says is trying to embrace a tough stance on unions.

"It's not the drivers or the union that caused this, by walking away from the mediator's proposal, Mayor Larry O'Brien might as well have locked-out our members."

Scheduling continues to be the main issue that's keeping more than 2,100 workers off the job. No new talks are scheduled.

The transit union holds its annual Christmas party on Saturday. A growing e-mail movement is encouraging others to show up -- and picket.

With a report from CTV Ottawa's John Hua and Vanessa Lee