Kufuor, the president of Ghana, first met President Mwai Kibaki at his State House office and residence, then went straight to a hotel for talks with Raila Odinga.

He says he was cheated of winning the December 27 vote by fraud.

The crisis has dented Kenya's reputation for stability in a turbulent corner of Africa, hurt key economic sectors like tourism and tea, and tainted Kibaki's previous reputation as a gentlemanly leader with a penchant for P.G. Wodehouse novels.

Long used to receiving refugees from neighbouring hot-spots like Sudan and Somalia, Kenya now has more than a quarter of a million of its own internally displaced people, many the victims of fighting between different ethnic groups.

In a statement after their meeting, Kibaki's office said the president assured Kufuor he was initiating dialogue.

"Now that peace was returning to these parts, his partially formed government would continue to reach out to Kenyan leaders who would also be encouraged to play their role in preaching peace among their followers," the statement said.

Kibaki has implied he could bring opposition figures into government and invited Odinga to a face-to-face meeting on Friday. But the opposition leader has declined, saying such a meeting would be a "sideshow" without an international mediator.

"On his part President Kufuor encouraged all Kenyan leaders to seek peaceful solution through dialogue and the relevant institutions to guarantee peace and stability for the country," the statement from Kibaki's office added.

Kibaki named 17 ministers late on Tuesday, sparking more violence around east Africa's largest economy.

Kenya's main paper, the Daily Nation, said the appointments -- which included a defeated presidential candidate and several figures hated by the opposition -- may "poison the atmosphere".

"It will be seen as a sign of bad faith ahead of the discussions about to begin," the newspaper said.

FOREIGN PRESSURE

Within minutes of the cabinet announcement by Kibaki, hundreds of rioters built burning barricades and stoned cars in Kisumu, a western stronghold of the opposition. A man was shot dead there as trouble rumbled through the night.

In Nairobi, opposition supporters also came out in the slums, some of them brandishing machetes.

"They are going wild. They are very angry about the new cabinet," said Onyango Apudo, a boxer living in the Mathare shanty-town. Two people died there, residents said.

Kibaki was making his first public foray on Wednesday since his disputed re-election, visiting the town of Eldoret in one of the areas worst hit by ethnic killings.

Officials say 486 people have died in election-related violence. But aid workers put the figure at more than 500, and the opposition say the toll could be nearer 1,000 from clashes between police and protesters, ethnic fighting, and looting.

International pressure for a negotiated solution is growing. Possible scenarios being touted include a power-sharing arrangement or a fresh election.

Washington says the presidential vote count was "obviously flawed" while London calls it "plagued by irregularity".

Stoking opposition anger, Kibaki retained several controversial figures in his new cabinet, including former hardline Internal Security Minister John Michuki who moved to the roads ministry.

But Kibaki's naming of Kalonzo Musyoka as vice-president, perceived by many as a bid to bring his Kamba tribe on board, prompted attacks on that group. Musyoka came a distant third in the presidential election.

Kibaki and Odinga have still not met face-to-face since trouble started when Kibaki was sworn in on December 30.

Odinga says Kibaki must step down and agree to a new election. Kibaki is reluctant to accept international mediation and his officials say the crisis, one of the worst since independence from Britain in 1963, is an internal affair.