NAIROBI (AFP) - US Secretary of State Condoleezza Rice on Monday urged for an urgent power-sharing deal between Kenyan President Mwai and opposition leader Raila Odinga and join a grand coalition.

"I frankly believe that the time for a political settlement was yesterday ... It is really important that this is done urgently," Rice told reporters in Nairobi where she arrived to support mediation talks lead by former United Nations chief Kofi Annan.

"There needs to be a governance arrangement that will allow real power-sharing, that will allow a grand coalition," she said after holding talks with Annan.

Rice also met separately with Kibaki and Odinga, whose dispute over who won the December 27 presidential election plunged once stable Kenya into violence in which more than 1,000 people have died.

"From both parties I heard a well-understood need to get an agreement."

Annan, and now Rice, are seeking an accord between Kibaki, 76, and Odinga, 63, who claims he was robbed of victory in the widely contested polls.

"The USA will continue to be a good friend of Kenya ... but we have to be a good friend of a Kenya that is stable, that has a legitimate government that is able to really govern its people," Rice said.

Kibaki's government had served notice on the eve of her visit that it would not bow to pressure to enter into an agreement with Odinga.

"We encourage our friends to support us, to encourage us, but not to make any mistake by putting a gun to anybody's head and say 'either, or' because that cannot work," Foreign Minister Moses Wetangula told reporters Sunday.

US President George W. Bush called for a power-sharing deal at the start of his Africa tour on Saturday. He said he was sending Rice to Kenya to support Annan's mediation.

Negotiations between the rival sides were due to resume on Monday, with Annan to meet separately with Kibaki and Odinga ahead of a new round of talks the following day.

Rice's spokeswoman Dana Perino told reporters Sunday in Dar es Salaam that the US secretary of state did not expect a "final deal" to be reached on Monday.

Kibaki's camp has balked at a power-sharing deal, saying in talks led by Annan that it was willing to include opposition members in government, but under the strong executive leadership of the president.

After initially welcoming Kibaki's re-election, the United States backtracked in the face of mounting evidence of flaws in the presidential poll and is now pressing the president to agree to a coalition with Odinga.

But during his visit to Tanzania on Sunday, Bush took pains to specify that the United States did not want to "dictate" a solution to Kenya, but merely "help move the process along."

The statement came after talks with Tanzanian President Jakaya Kikwete, who holds the rotating chair of the African Union.

The United States considers Kenya a strategic ally in the fight against militant extremists and a key player in resolving conflicts in neighbouring Somalia and Sudan.

Negotiators for Kibaki and the opposition moved from a Nairobi hotel to a secluded safari lodge in southern Kenya last week to finalise details of a deal that Annan said was only days away.

But the former UN secretary general emerged from talks on Friday to announce that no final agreement had been reached and that "the last outstanding issue" remained power-sharing in a new government.

Launched by the African Union, Annan's mediation is seen as Kenya's best hope for a political solution to move beyond the violence. The recent unrest has seen Kenyans killed by machete-wielding mobs, burnt in churches and driven off their land.

The violence has tapped into simmering resentment over land, poverty and the dominance of the Kikuyu, Kibaki's tribe, in Kenyan politics and business since independence from Britain in 1963.

As calm appeared to take hold over the country in the past week, the United States and Britain have turned up the pressure on Kibaki, fearful that a collapse of the Annan talks could re-ignite the violence.

Washington and London have threatened visa bans, an assets freeze and other measures