ANNAN SAYS

The African Union panel chaired by former UN chief Kofi Annan on Thursday urged Kenya's feuding leaders to iron out their differences and preserve two years of painstaking progress.

"The African Union Panel of Eminent African Personalities expresses its concern at the current political impasse in Kenya and the effect this could have on the implementation of the National Accord," a statement said.

The panel, under Annan's leadership, brokered an accord following the violence that erupted after disputed December 2007 elections, leaving 1,500 dead and a quarter of a million people displaced.

The accord resulted in a power-sharing deal between the two poll rivals, Mwai Kibaki and Raila Odinga, whereby the former kept his job as president and the latter was made prime minister.

In its statement, Annan's panel said the coalition government had achieved progress on key issues such as constitutional, land and electoral reform, since it was formed almost two years ago.

"The Panel warns, however, that these achievements could be reversed if the current disagreement is not swiftly resolved," it said.

Tensions between the premier and the president boiled over at the weekend when Odinga sacked the education and agriculture ministers accused of graft. Kibaki vetoed the move, arguing Odinga was overstepping his prerogatives.

Odinga's detractors charged he was only seeking to undermine Agriculture Minister William Ruto, who is likely to be one of Odinga's main rivals in 2012 presidential polls.

Kibaki's critics said the protecting of scandal-ridden officials by the president and his entourage was further evidence that the regime was corrupt.

The clash has resulted in threats from Odinga's party to boycott cabinet meetings and in the government of national unity looking closer to collapse than ever before.

Annan's panel urged the two principals "to meet urgently in order to agree" on the application mechanisms of power-sharing and on a common stance against corruption.

Vice Prime Minister Musalia Mudavadi has urged Annan to return to Kenya and salvage the national accord before it unravels.

On Wednesday, the United States also voiced deep concern over the ongoing row and called for a swift resolution.