AU keeps Madagascar suspension despite new deal

ADDIS ABABA (Reuters) - The African Union (AU) said on Saturday it would not re-admit Madagascar until a newly agreed power-sharing government was in place and fresh elections in the pipeline.

Earlier, the island's rivals signed a deal under which coup-instigator Andry Rajoelina would remain president, accompanied by two new co-presidents.

Deposed leader Marc Ravalomanana had rejected any accord which would have seen his successor retain sole leadership of the oil and mineral-endowed country.

"The sanction against Madagascar is not yet lifted. First the transition's institutions must be set up and functioning and there is a clear roadmap toward elections," Ramtane Lamara, president of the AU's Peace and Security Council told Reuters.

Negotiations on who takes which of the 31 cabinet posts could cause conflict, as could how power is shared and exercised.

Political turmoil has rocked the Indian Ocean island since Rajoelina, 35, unseated Ravalomanana with military support in March, drawing widespread condemnation from African nations and foreign powers. The AU also suspended Madagascar in March.

International mediators have brokered earlier deals with Madagascar's leaders, only for personal interests and political ambitions to stymie their implementation.

France, which has kept close political and business ties with Madagascar since its independence in 1960, welcomed the breakthrough and urged the nation's leaders to forge ahead with national interest at the fore.

"It is important now to implement these commitments by setting up the new transitional institutions and by rapidly organizing elections that will establish the new framework of Madagascan democracy," French Foreign Minister Bernard Kouchner said in a statement.

Ravalomanana has previously said Rajoelina is a puppet of French interests.

FRAGILE AND HOT-BLOODED

Lydie Boka, Madagascar expert at the risk consultancy group StrategieCo., said the crisis was far from over and pointed to the frequent internal bickering within Kenya and Zimbabwe's unity governments.

"I expect this to be a fragile and hot-blooded coalition with each movement trying to block the other," she said.

In early signs of friction over the functions of the two co-presidents, Rajoelina said they merely replaced the previously envisaged vice president but Ravalomanana will probably see them as a check and balance on his successor.

Ravalomanana, a self-made millionaire, remained non-committal about a possible return home. "It's not yet the right moment," he told Reuters as he left for South Africa, where he is exiled.

Analysts say the deal will allow donors who suspended aid worth hundreds of millions of dollars to resume work with Madagascar without flouting their own democratic ideals.

However, some diplomatic sources have said their governments will await the holding of free and fair elections before fully turning on the aid taps. Presidential elections must be held by late 2010 under the terms of the initial power-sharing deal.

(Additional reporting by Richard Lough in Antananarivo and Estelle Shirbon in Paris; Writing by Richard Lough; Editing by David Stamp)