Kenya's opposition vowed to defy police for a second day running on Friday and try to hold a mass rally in the capital while the top US diplomat for Africa was flying in amid chaos that has killed more than 300.
Efforts by the opposition to stage the banned protest on Thursday were met by police firing teargas and warning shots as thousands of angry youths poured out of Niarobi's slums and tried to march on the city centre.
The protesters are enraged by President Mwai Kibaki's disputed victory in the Dec. 27 election. Five days of ethnic violence and riots since the official results were announced have shocked the world.
More than 300 people have died in clashes mostly pitting Luo supporters of opposition candidate Raila Odinga against Kibaki's Kikuyu ethnic group and the police.
In the capital's tribally polarised shanty-towns, witnesses said the bloodshed continued into the early hours. "They are mixing petrol bombs as we speak," said a resident of Kibera, one of Africa's biggest slums and the scene of many of the battles.
Offices in the central business district were deserted and gunshots cracked overhead on Thursday as police in riot gear battled protesters trying to reach Uhuru (Freedom) Park.
Trading on the stock exchange was halted just an hour after it opened due to the turmoil, which threatened to wreck Kenya's reputation as one of Africa's most promising democracies and strongest economies.
US Assistant Secretary of State Jendayi Frazer was due in Nairobi on Friday to meet Kibaki and Odinga. In a Reuters interview, U.S. President George W. Bush was asked on Thursday whether the two men should share power. "They have an opportunity to come together in some kind of arrangement that will help heal the wounds of a closely divided election," Bush said.
"Ready To Talk"
The World Bank has warned the wave of violence could hurt the country's impressive economic gains -- and harm countries in the region that rely on it as east Africa's business hub. Uganda, Rwanda and Burundi are already suffering acute fuel shortages as the conflict chokes off supplies from the coast.
Senior officials from both sides of Kenya's political divide have traded accusations of genocide and ethnic cleansing over the clashes. But on Thursday, Kibaki struck a more conciliatory note in his first words to the press since the troubles began.
"I am ready to have dialogue with the concerned parties once the nation is calm," he told reporters on the State House lawn.
The European Union has urged him and Odinga to form a coalition government. Its observer mission had ruled the election had fallen short of key democratic standards -- especially the counting process that gave Kibaki a narrow win.
Kenya's Attorney General Amos Wako said on Thursday that both sides should now agree on an independent person or body to carry out "a proper tally" of the votes cast. The country was quickly degenerating into a catastrophe of "unimaginable proportions," he said, and such a step would go a long way to sooth tempers.
Given the claims of wanton ballot-stuffing by both sides, and the chaotic way the final results were announced -- police swept in to rescue the electoral commission boss from opposition hecklers -- many Kenyans were sceptical a recount would work.
"What African president can step down in these circumstances?" asked George, a Nairobi hotel worker. "Besides, the government has had that paperwork for a week ... If they cheated, it has been forged by now. Or more likely they burnt it."
(Additional reporting by Katie Nguyen, Helen Nyambura-Mwaura, George Obulutsa, Joseph Sudah, Wangui Kanina, Duncan Miriri, Bryson Hull; Guled Mohamed in Kisumu; Tim Cocks in Eldoret; Edited by Dominic Evans)