Jan 29 (Reuters) - President Mwai Kibaki and opposition leader Raila Odinga opened formal mediation under former U.N. chief Kofi Annan on Tuesday, seeking an end to a month-long political crisis that has degenerated into ethnic violence.
More than 850 people have been killed and 250,000 displaced. Below are some facts about how the crisis came about and what might happen next.
* The Dec. 27 election started smoothly, but delayed tallying and charges of vote rigging stoked tensions among Odinga's Orange Democratic Movement (ODM) supporters after his lead evaporated and Kibaki was sworn in hurriedly on Dec. 30.
Riots and looting broke out in opposition strongholds within minutes, and ethnic killings targeting Kibaki's Kikuyu tribe and others seen as backing him erupted in the Rift Valley.
Election observers noted serious flaws in the tallying, and both sides claimed rigging. ODM said Kibaki stole the vote, refused to recognise him as president, and demanded international mediation.
Kibaki says he was legally elected and urged ODM to go to court over the vote. ODM opted for street protests, which were met with a heavy police response. Ethnic killings have made up the bulk of the growing death toll and both sides have accused the other of targeting their supporters.
As in all of Kenya's elections but one since multi-party politics returned in 1992, politicians have incited ethnic divisions over land, wealth and power -- hangovers of Britain's colonial divide-and-rule policies -- to hold onto power.
The current scenes are similar to those played out at past elections but are by far the worst. The crisis has dented Kenya's reputation as stable democracy and hurt its economy, the biggest in east Africa and one of the strongest on the continent.
WHO'S TRYING TO HELP:
Former U.N. Secretary-General Annan is leading the mediation effort, which has wide backing from the international community including the United States, Britain and the European Union. The 69-year-old Ghanaian is joined by former Tanzanian President Benjamin Mkapa and Graca Machel, wife of Nelson Mandela.
Annan's mediation came after Ghana's President John Kufuor, chair of the African Union, left empty-handed after a brief attempt at mediating earlier this month. Archbishop Desmond Tutu and some former African presidents have also tried brokering a deal. Ugandan President Yoweri Museveni, chair of the East African Community regional bloc, has also met with both Kibaki and Odinga, and Libya sent a special envoy.
* In a doomsday case, some fear Kenya could descend into spiralling ethnic violence that would further batter the economy and lead to a flight by investors and the many foreign organisations that make their homes in Nairobi, a regional hub.
* Some diplomats are pressing for a power-sharing deal. Kibaki has left half his cabinet open to leave space for opposition members. Government officials say that a reshuffle to give the opposition some of the more plum appointments is not out of the question.
* ODM is adamant that it wants a new election or a re-count. The first is not likely to happen because of the cost and potential for bloodshed, but the latter may, diplomats say.
* One compromise might involve a re-drafting of the constitution to address some of the underlying issues, including what many Kenyans see as the concentration of too much power in the presidency. ODM defeated a government-backed redraft in 2005, but has said it may consider reform as an option.
(Writing by Bryson Hull in Nairobi)
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