UPDATE 2-Norway's Telenor lifted by Ukraine unit EGM

* Telenor and Russian co-owner of Kyivstar hold EGM

* Telenor shares leap on hopes Kyivstar feud could end

* Kyivstar shareholders set 2004-05 dividend

(Adds details, dividend; updates share price)

By John Acher

OSLO, Dec 16 (Reuters) - Shares in Norwegian telecom group Telenor (TEL.OL) leapt 8 percent on Tuesday when the company and its estranged Russian partner held shareholders' meetings in their Ukrainian unit Kyivstar for the first time since 2005.

Telenor and co-owners of Kyivstar from Russia's Alfa Group held not just one but two extraordinary general meetings in Kiev on Tuesday, first to elect a new board for the Ukraine operator and then to approve accounts and dividends for 2004 and 2005.

The EGMs offered some hope that Telenor could resolve a long-running boardroom and courtroom battle with Alfa Group over strategy in Kyivstar and their co-owned Russian operator Vimpelcom (VIP.N), analysts said.

Telenor shares traded up 7.8 percent at 42.30 crowns at 1609 GMT, having earlier reached 44 crowns. The stock outpaced a 0.9 percent rise in the Oslo bourse benchmark index .OSEBX.

"The market reacts the way it does because it can now see the light at the end of the tunnel and this conflict could be moving towards a resolution," Carnegie analyst Espen Torgersen said.

Telenor shareholders also cheered because Kyivstar holds about $1.5 billion in cash, and the Kyivstar shareholders agreed to pay out a dividend of 3.46 billion Ukrainian hryvnia, which Telenor said was equivalent to about 2.9 billion Norwegian crowns ($419.7 million), for 2004 and 2005.

Such a cash boost to Telenor, which owns 56.5 percent of Kyivstar, also raised the prospect that the Norwegian company could avoid turning to existing shareholders for an equity injection to fund its expansion plans in India, analysts said.

Telenor said an external audit will be needed before the accounts and dividends for 2006 and 2007 can be approved.

Torgersen said it was uncertain how easy it would be to repatriate the money due to currency restrictions.

The Kyivstar shareholders elected a new board with five Telenor representatives and four from Alfa's affiliate Storm, Telenor said in a statement.

They also elected a new auditing commission, Telenor said.

Alfa's Storm unit, which owns 43.5 percent of Kyivstar, has boycotted shareholders' meetings for the past few years, which led Telenor to deconsolidate the company in early 2007 because it said it lacked control of the Ukrainian operator.

"We hope that we have seen the end of attacks on Kyivstar's corporate governance," Jan Edvard Thygesen, head of Telenor's Central and East European operations, said in the statement.

"If so, today's resolutions should form the basis for its restoration," he said.

Storm attended the Tuesday EGMs after a U.S. federal court in November held it in contempt of court and ordered it to attend or pay fines starting at $100,000 a day.

Some Telenor investors have hoped cash from Kyivstar dividends could help Telenor avoid a share issue to fund its acquisition of a 60 percent stake in Indian Unitech Wireless, which the company announced at the end of October.

"Some people will wish to read into this a way of funding Telenor's Indian expansion, and hence reducing the chance of a share issue," Torgersen said.

Officials at Alfa Group's telecoms arm Altimo were not immediately available for comment. (Editing by Sharon Lindores and Andrew Macdonald)