(Adds Bush statement, paragraphs 9, 10)
By Alistair Thomson and Daniel Wallis
NAIROBI, Jan 7 (Reuters) - Riots and post-election violence in Kenya may have killed up to 1,000 people, the opposition said on Monday as it halted protests and President Mwai Kibaki invited his main rival to talks.
The east African country has been hit by a wave of demonstrations and tribal clashes since Kibaki's disputed win in Dec. 27 polls over opposition challenger Raila Odinga.
The government raised its death toll to nearly 500 and 255,000 displaced Monday. But Odinga told Reuters that "closer to a thousand" people might have died.
Aid workers say the toll could go higher after one of Kenya's worst crises since independence from Britain in 1963.
Kibaki's office said he had invited Odinga and several religious leaders to talks Friday on how to stop the violence, consolidate peace and forge "national reconciliation."
Odinga's aides could not immediately be reached for comment.
As international mediation efforts were stepped up, the head of the African Union, John Kufuor, was due to arrive in Nairobi Tuesday, and Odinga said the Ghanaian president could begin chairing talks as early as Wednesday.
World powers have been horrified by the sudden outbreak of bloodshed in a country once seen as one of the continent's most stable democracies and promising economies.
U.S. President George W. Bush welcomed Kufuor's visit to Nairobi and urged both sides to enter the talks in good faith to regain the trust of the Kenyan people.
"I condemn the use of violence as a political tool and appeal to both sides to engage in peaceful dialogue aimed at finding a lasting political solution," Bush said in a statement.
In her first public comments since arriving Friday, Washington's top diplomat for Africa said the crisis had not shaken U.S. confidence in Kenya as a strong regional hub.
"It has actually further deepened our sense that Kenya is a strong regional partner," U.S. Assistant Secretary of State Jendayi Frazer told a news conference.
She said Kenyans had come together to "haul themselves back from the brink," but had been let down by their leaders.
"They have been cheated by their leadership and their institutions. ... The political leaders have to stop the violence ... and they have to reform the institutions."
Odinga had looked on course to win the Dec. 27 ballot until Kibaki, 76, was handed a narrow victory. Both sides alleged widespread rigging and international observers say the poll fell short of democratic standards.
'KIBAKI LACKS LEGITIMACY'
Odinga, who turned 63 Monday, is under international pressure to avoid provoking more violence, but he also wants to maintain momentum to oust Kibaki.
Kibaki's government accuses Odinga's Orange Democratic Movement (ODM) of "grandstanding" and stoking further unrest.
Adding to the chaos, the main Kenyan lawyers' organization, the Law Society of Kenya (LSK), accused electoral officials of "dishonesty and ineptitude," called Kibaki's swearing-in "null and void," and urged a fresh vote.
"Kibaki lacks legitimacy to govern and this is the cause of the problems that we are facing as a country," it said.
Government spokesman Alfred Mutua said the statement was inaccurate, misleading and confusing to the public.
"LSK should not be partisan and should exercise responsibility by refraining from making claims based on events where they were not present, have no idea of what occurred and at what time," Mutua said.
Kenyans say mutual distrust between Odinga and Kibaki is a major obstacle to any solution.
Kibaki has said he is ready to form "a government of national unity." But Odinga wants him to step down and hold internationally mediated talks to agree on a "transitional arrangement" before a new vote in three to six months.
Around the country of 36 million people, the poor in city slums and rural areas have been worst hit. The political elite, other affluent Kenyans and expatriates have been largely unaffected in guarded compounds.
Kibaki met six bishops from the worst affected area -- Rift Valley -- Monday to explore ways to end the unrest.
The election dispute unleashed protests, riots and anarchy that have scattered refugees across a nation more used to helping those fleeing from countries like Sudan and Somalia.
Eleven U.N. trucks were heading to western Kenya, the heart of the refugee crisis, under police escort Monday, with enough food to feed 38,000 people for two weeks.
Much of the trouble has pitched opposition supporters against members of Kibaki's Kikuyu tribe, including the massacre of about 30 people sheltering in a church near Eldoret, a western town with decades-old land tensions. (Additional reporting by Barry Moody, Andrew Cawthorne, Bryson Hull, Radu Sigheti, Helen Nyambura-Mwaura, Duncan Miriri, George Obulutsa, and JoAnne Allen in Washington, writing by Daniel Wallis; Editing by Charles Dick and Eric Walsh)