updated 11/10/2007 1:50:05 AM ET 2007-11-10T06:50:05

Pressure mounted Friday for stalled negotiations to resume in the Hollywood writers strike, with Gov. Arnold Schwarzenegger and Mayor Antonio Villaraigosa calling for a deal before the financial toll climbs higher.

But as the walkout logged its fifth day, with production shut down on more than a dozen prime-time shows, some outside observers painted a bleak picture, saying it could take weeks or even months before writers and producers had enough incentive to break their deadlock.

"I think you need to see more time, more posturing and possibly more pain inflicted," said Carole Handler, an entertainment lawyer who specializes in new technology issues such as those involved in the labor dispute.

Negotiations broke off late Sunday after the Writers Guild of America dropped its demands for more money from DVD sales but no agreement could be reached on payments from shows offered on the Internet.

The Alliance of Motion Picture and Television Producers won't consider returning to the bargaining table until writers go back to work, according to a person familiar with the position of the alliance but who was not unauthorized to speak publicly and asked to remain anonymous.

On Friday, a crowd that police estimated at 3,500 people converged on the gates of 20th Century Fox studios for the biggest rally yet by striking writers.

It was part of twin protests in Los Angeles and New York targeting News Corp., which owns the movie studio and the Fox TV network.

In the latest setback for workers, NBC told the non-writing staff of "The Tonight Show with Jay Leno" that they face layoffs next week because of the strike, according to a network executive who wasn't authorized to comment publicly and asked to remain anonymous.

The show has been in reruns since the walkout started. Using guest hosts is one thing being considered to restart production and avoid layoffs, the person said.

Schwarzenegger said he had urged both sides to reach a deal so thousands of behind-the-scenes workers already idled by stalled TV production could return to their jobs.

Video: Scoop: Hollywood on hold "I think that's the sad story, because the studio executives are not going to suffer, the union leaders are not going to suffer, the writers that are striking, they are not going to suffer. Those are all people that have money," the actor-turned-governor said.

He said he had not been invited to participate in negotiations.

"If I'm asked, down the line, I will get involved," Schwarzenegger said. "But at this point, I've been talking to them."

Villaraigosa has been in daily contact with both sides to encourage a new round of talks, said Matt Szabo, his press secretary.

"He is willing to provide whatever assistance would be necessary to reach a swift resolution of the strike," Szabo said.

Chief union negotiator David Young told The Associated Press he would be happy to go back to the negotiating table if union proposals were taken seriously.

He said the guild was disappointed after it dropped its demand for more money from DVD sales and producers failed to give a counteroffer.

"That merits a very serious response," Young said.

The last writers walkout in 1988 lasted 22 weeks and cost the industry $500 million. The entertainment industry contributes an estimated $30 billion a year to the Los Angeles economy, or about $80 million a day.

Norman Samnick, an attorney who has negotiated with writers while working for Warner Bros., said additional pressure to end the standoff is likely coming privately from talent agents and large advertisers.

Spirits were high at the Los Angeles rally, as people in the crowd munched on muffins and listened to a performance by singer-rapper Zack de la Rocha and guitarist Tom Morello of Rage Against the Machine.

Rina Mimoun, a writer for the ABC show "Pushing Daisies," said she was inspired by the big turnout and hoped it would create awareness about issues in the strike.

Mimoun said "Pushing Daisies" had been gaining an audience after premiering this fall. But with no stockpiled scripts, production will stop around Thanksgiving, she said.

"Everyone is going to lose viewers," Mimoun said. "Ironically, audiences will find stuff to watch on the Web."

Writer Sarah McLaughlin said she was not hopeful about negotiations.

"They can't even decide who left the table last. How are we going to agree on a contract?" she said. "It's like a nasty breakup."

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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