Annan hopes for Kenya political deal in days

By Andrew Cawthorne and C. Bryson Hull

NAIROBI (Reuters) - Kenya's feuding political parties may reach a breakthrough within days to help end violence after a disputed election that has left more than 1,000 people dead, mediator Kofi Annan said on Friday.

The former U.N. chief's upbeat assessment came as local media speculated a power-sharing deal was on the cards between President Mwai Kibaki and opposition leader Raila Odinga, whose disagreement has brought unrest shattering Kenya's stability.

"I sincerely hope that we will conclude our work on item three, the settlement of the political issues, by early next week," said Annan, who is mediating the dispute.

"We are all agreed a political settlement is necessary with a little patience and a bit of luck."

In addition to the killings, the ethnic attacks and battles between police and protesters have uprooted more than 300,000 people, wrecking Kenya's image as a stable business, tourism and transport hub.

Negotiators for Kibaki and Odinga have agreed on principles to stem violence and help refugees, but were stuck this week on the crucial dispute over the vote tally.

Odinga's Orange Democratic Movement (ODM) says Kibaki supporters rigged the vote, but Kibaki's Party of National Unity (PNU) says the opposition cheated in its heartland and points to the election board's announcement Kibaki had won.

Annan has given both sides until mid-February to resolve that issue and then move on to tackle deeper, underlying problems like land and wealth inequality within a year.