Kibaki offers talks, protests shake Kenya

NAIROBI (Reuters) - With corpses littering the streets and smoke billowing from burning slums after battles between police and anti-government protesters, Kenya's President Mwai Kibaki offered on Thursday to talk to his political rivals.

"I am ready to have dialogue with the concerned parties once the nation is calm," Kibaki said.

A week of bloodshed since a December 27 election has killed more than 300 people and threatens to wreck Kenya's reputation as one of Africa's most promising democracies and strongest economies.

"I am deeply disturbed by the senseless violence instigated by some leaders," Kibaki told reporters on the lawn of his residence. "Those who continue to violate the law will face its full force."

After police clashed for hours in Nairobi with thousands of protesters angered by Kibaki's victory, the opposition called off a planned rally in the capital's Uhuru (Freedom) Park, saying it wanted to save lives. It vowed to try again on Friday.

"The rally is on for tomorrow," spokesman Salim Lone said. Both sides accused the other of vote-rigging in the election, won narrowly by Kibaki, according to official results.

U.S. President George W. Bush urged Kenyans to refrain from further violence and called on Kibaki and opposition leader Raila Odinga to "come together" to resolve the dispute.

Asked in a Reuters interview whether Kibaki and Odinga should share power, Bush said: "I believe that they have an opportunity to come together in some kind of arrangement that will help heal the wounds of a closely divided election."

The European Union urged them to form a coalition government.

Currency and stock trading was halted in Nairobi on Thursday, with the shilling and share prices down about 5 percent since the troubles began.

The World Bank said the violence could threaten Kenya's impressive economic gains and harm neighboring countries that depend on it as a business hub.

The disputed polls have unleashed vicious tribalism around Kenya. Both sides accuse the other of ethnic cleansing.

"This is genocide being conducted by the political class illegally sitting in State House," Odinga said after taking journalists to view corpses with gunshots at a city mortuary.

CATASTROPHE

He named two Kibaki allies as backing a Kikuyu gang behind some of the killings. On Wednesday the government accused Odinga's Orange Democratic Movement (ODM) of organized genocide.

Reuters reporters saw at least four bodies lying in the dust near the Mathare slum. Three were beaten and slashed to death by mobs and the fourth killed by a falling power cable.

Warning that Kenya was "quickly degenerating into a catastrophe of unimaginable proportions," Attorney General Amos Wako said both sides should agree on an independent person or body to carry out "a proper tally" of votes from the election.

"Such an exercise will go a long way in assuaging the inflamed passions of people," Wako said.

But he said that while the tally should help political mediation, only a court could overturn Kibaki's win.

Nairobi was virtually deserted by workers on Thursday and was soon transformed into a battleground. Columns of protesters surged out of slums towards the city centre, singing the national anthem, chanting "Peace" and waving twigs and leaves.

When confronted by police, they first sat or kneeled in the road. As tempers rose, they began burning cars and buildings.

Police responded with teargas and water cannons, also firing bullets in the air when the crowd knelt down and taunted: "Kill us all", a Reuters witness said.

Protester Julius Akech yelled: "This is dictatorship now."

International figures urged talks in a nation previously known as an African peacemaker rather than a disaster zone.

"This is a country that has been held up as a model of stability. This picture has been shattered," said South African Nobel peace laureate Archbishop Desmond Tutu, in Kenya to try to start mediation. "This is not the Kenya that we know."

While most foreign observers said the vote fell short of democratic standards, Uganda's President Yoweri Museveni was the first African leader to congratulate Kibaki.

In rural areas, the unrest has touched off deep ethnic tensions. In an area where 30 members of Kibaki's Kikuyu tribe were killed in a church torched by a mob, young men with machetes manned roadblocks and hunted their enemies.

Kikuyus, long dominant in politics and business, were targeted in initial clashes but revenge killings -- including some by the Kikuyu Mungiki criminal gang -- are on the rise.

Kenyan media united in an appeal, with every major newspaper running the same front-page: "Save Our Beloved Country".

(Additional reporting by Katie Nguyen, Helen Nyambura-Mwaura, George Obulutsa, Joseph Sudah, Wangui Kanina, Duncan Miriri, Bryson Hull; Guled Mohamed in Kisumu; Tim Cocks in Eldoret; Editing by Daniel Wallis and Robert Woodward)