Rendell said the five-year contract spurned by leaders of Transport Workers Union Local 234 called for a $1,250 signing bonus upon ratification, a 2.5 percent raise the second year, and a three percent raise in each of the next three years.

It also called for an increase in pension payments to workers and no increase in their health-insurance contributions.

Rendell said he had agreed to give SEPTA $6 million from an economic development fund in the Pennsylvania Department of Transportation to help pay for the contract sweeteners.

"The union leadership walked on a victory last night," Rendell said. "They just didn't know when to declare victory."

TWU Local 234 president Willie Brown said the major sticking points were increased pension contributions from workers, job "picking" rights, and the length of the contract. He said the union wanted three percent wage increases for each year of a four-year contract.

"I understand I'm the most hated man in Philadelphia right now," Brown said. "I have no problem with that."

Brown said he had gone against his union's best interests by acquiescing to a request by Rendell and Mayor Nutter not to strike during the World Series.

"The smart thing to do would have been to say, 'we're going out,'" Brown said. "My workers wanted me to go. But I didn't. I'm a Philadelphian, too."

But once the threat of a strike during the World Series evaporated, Brown said, Rendell and Nutter grew increasingly less flexible.

"They were kicking us around like we were the prime cans of the world."

Brown said Nutter's biggest concern was that the SEPTA contract would set a pattern for city workers, including police and firefighters. Brown argued that SEPTA was in better financial condition than the city and could afford a more lucrative settlement.

More than 5,000 of SEPTA's bus, subway and trolley operators and mechanics did not report to work today, after union leadership called a strike at 3 a.m.

The union has been without a contract for seven months. It had initially set a strike deadline of midnight Friday, which would have coincided with the World Series games being played in Philadelphia.

But, at the urging of Rendell and Mayor Nutter, the union agreed to continue service during the World Series as talks resumed. The baseball championship series has now returned to New York.

No resumption of negotiations was scheduled today, as hundreds of thousands of work-a-day riders scrambled to find alternate ways to and from work.

Rendell, Nutter and U.S. Rep. Robert Brady were involved in the talks until they broke off early today. Rendell, who said he had slept little for the past three nights and missed Game 5 of the World Series because of the negotiations, said he was willing to continue to work with both sides.

"All the movement was on the management side," said Rendell.

In a telephone press conference from New York, Rendell said the contract rejected by the TWU leadership was much better than the terms being received by workers in the private sector or those at the transit agency in Pittsburgh.

"Most people are losing their pensions, most people are paying significantly higher level of contributions for health care," Rendell said.

Union leaders "have to deal with the reality of the situation and look at the economy," Rendell said, urging union members to contact their leaders and urge a settlement.

Rendell, who on Saturday had threatened sanctions against either side who walked out on talks, did not specify what action, if any, he might take against the union.

"I might decide not to put in state money" to help SEPTA pay for union wage increases, he said, referring to the $6 million from the PennDOT economic development fund.

U.S. Rep. Chaka Fattah (D., Pa.) in the meantime called today for an immediate resumption of negotiations.

"The working men and women and their families in the neighborhoods of Philadelphia are the ones feeling the impact of today's transit system strike most severely," Fattah said in a statement. "Both management and union may see these riders as 'leverage' but they are not pawns, they are the lifeblood of our city – especially in these harsh economic times. They deserve better, and they deserve an immediate settlement."