(Adds State Department quote, edits)
By Daniel Wallis and Wangui Kanina
NAIROBI, Jan 10 (Reuters) - An African Union mission to resolve a political crisis in Kenya that has killed 500 people ended in failure on Thursday as the president and opposition leader accused each other of wrecking talks.
AU Chairman John Kufuor said both sides had agreed to work with an African panel headed by former U.N. Secretary General Kofi Annan. But President Mwai Kibaki and opposition chief Raila Odinga neither met nor agreed how to end the crisis.
Controversy over Kibaki’s re-election in a Dec. 27 vote triggered political and ethnic bloodletting that has displaced 250,000 people, dented the stable reputation of east Africa’s biggest economy and disrupted supplies to nearby countries.
Odinga says Kibaki rigged the election.
Ghanaian President Kufuor, Washington’s top Africa diplomat Jendayi Frazer and EU and British envoys met Odinga on Thursday to pile pressure on him and on Kibaki to reach a deal.
Odinga’s Orange Democratic Movement (ODM) distributed the text of a draft agreement it said had been drawn up with representatives of both Kibaki and the ODM under the facilitation of the World Bank’s country director, Colin Bruce.
The text agreed to re-examine the elections and hold fresh polls if needed, but the ODM said Kibaki refused to sign.
"It is true to his character and can only be treated with the contempt it deserves," said ODM Secretary General Anyang’ Nyong‘o. "This is a slap in the face ... to the (AU) mission and the international community," he said.
Kibaki’s office denied knowledge of the agreement and in a statement it accused the ODM of blocking negotiations.
"The government had offered dialogue which was to be facilitated by President John Kufuor but Orange Democratic Movement leaders have not been responsive," it said.
Kufuor put a brave face on his two-day mission before leaving the country on Thursday.
"The parties agreed to work together with a panel of eminent African personalities headed by Mr Kofi Annan ... towards resolving their differences and all other outstanding issues including constitutional and electoral reforms," he said.
"Both sides agreed there should be an end to the violence and they also agreed there should be dialogue," he told reporters as he left for the airport.
In a sign tensions were still high after two weeks of violence, riot police fired tear gas at around 70 pro-opposition women who marched and blocked a road in a Nairobi suburb.
Some women lay down, stripped to their bras and shouted "Shame on you" at police who tapped their plastic shields with their batons. Police then fired tear gas to disperse the women, including one clutching a baby to her bosom as she fled.
Previously regarded as a gentlemanly leader with a passion for golf, Kibaki has shown a steely side to Odinga, a former political prisoner and wealthy business owner who helped Kibaki win a 2002 poll but was sacked from government in 2005.
Kibaki has insisted the poll results stand despite inviting Odinga to direct talks on Friday -- an offer the opposition leader has dismissed unless it is internationally mediated.
Behind closed doors, Kibaki watched the swearing-in of a core cabinet whose appointment on Tuesday prompted more violence in Nairobi slums and western towns dominated by Odinga.
A U.S. State Department spokesman criticised Kibaki’s move.
"He (Kibaki) announced a cabinet in a way that caused serious problems in the political process," he said.
"We did not think the move was appropriate at the time."
Kenya’s state-funded National Commission on Human Rights presented a petition to police on Thursday demanding a criminal investigation into alleged abuses by the electoral commission.
Washington and Britain have both said the poll was flawed.
Both Kibaki’s and Odinga’s parties say they will be able to mobilise a majority in parliament. Odinga’s Orange Democratic Movement has threatened to occupy the government side of the chamber when parliament opens on Jan. 15.
The official death toll from election-related political and ethnic violence is 486, although aid workers put it at more than 500, and the opposition say the toll could be nearer 1,000. (Additional reporting by Duncan Miriri, Joseph Sudah, Andrew Cawthorne and Katie Nguyen; writing by Alistair Thomson; editing by Andrew Roche)