Kenya's rival leaders signed on Thursday a power-sharing deal brokered by former UN chief Kofi Annan to end a bloody two-month political crisis that has split the nation along ethnic lines.

President Mwai Kibaki and opposition chief Raila Odinga signed the accord on forming a coalition government outside the president's office.

The deal creates the post of prime minister and two deputy prime ministers in a bid to break the political deadlock created by contested presidential elections that triggered unrest across the country, killing more than 1500 people and displacing 600 000 more.

Chief mediator Annan and Tanzanian President Jakaya Kikwete, who heads the African Union, were present at the ceremony.

"We have come to an understanding on the coalition agreement," Annan told reporters.

"I am pleased to be able to tell you and the citizens of Kenya that the two leaders this afternoon completed work on... how to overcome the political crisis. I commend all those whose efforts have made this possible."

Annan urged parliament to convene soon to pass the bill allowing the creation of a coalition government.

Odinga said the new government, which he thought would be up and running by about the middle of March, would look to make significant constitutional, electoral and land reforms within its first year.

"First, we have to bring a bill to parliament and it has to be approved, assented by the president," the opposition leader said.

"After that, the government will be put in place and I think we will form the government in the third week of the month of March," he told Sawa radio.

Kenyans took to the streets mainly in the coastal city of Mombasa and the lakeside city of Kisumu to celebrate the deal.

"We are very happy because finally they have agreed," said Mike Omondi (35) a resident of the Nyalenda slums in Odinga's heartland of Kisumu. "We now have our share," he added.

Negotiators had previously failed to agree on a power-sharing formula to resolve the crisis that erupted after Odinga accused Kibaki of rigging the 27 December presidential election.

Huts torched in Rift Valley

At Annan's request, Odinga cancelled opposition rallies called for on Thursday and went back into talks, but as negotiations resumed, police reported another deadly attack overnight in the western Molo district of the Rift Valley.

Three people were killed, five others wounded and more than 30 huts torched, Rift Valley police commander Joseph Ashimala said.

"They were attacked and shot with arrows when more than 100 youths raided villages and torched houses," Ashimala said.

Police said most of the houses torched belong to people who had recently returned after being evicted from their homes in the recent violence.

A local member of Kibaki's Kikuyu tribe, Irari Mugo, said the attack was carried out in the early morning by people from the Kalenjin tribe.

"The Kalenjin came and started burning houses. Police were slow in responding. When they arrived the Kalenjins had already burned them," Mugo said.

Although the Kikuyu are the largest of the east African country's many tribes, they are a minority in western Kenya, where people overwhelmingly back Odinga, a Luo, who also has strong support from the Kalenjin.

The United States welcomed the deal between Kibaki and Odinga to form a coalition government, while Prime Minister Gordon Brown of former colonial ruler Britain hailed it as a "triumph for peace and diplomacy."

"We will be watching very carefully to see how it proceeds," US State Department Tom Casey spokesperson said.

Casey said it was important that the constitutional changes the agreement called for also took place, so that "the kind of conflict and the kind of situation we saw after these elections does not occur again in the future."

"We certainly would hope that everybody associated with their political parties and movements would work with them to support this deal and move forward," Casey said.

Kibaki has said the post of prime minister and two deputies will be created under the current constitution pending a comprehensive constitutional review in 12 months.

The main issue dividing the two sides appeared to have been how much power the prime minister would be granted in a nation that provides constitutionally for strong presidential rule.

AFP

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