The 69-year-old statesman met with the Kenyan president for just over an hour at Kibaki's official State House residence in the capital Nairobi, after discussions with African diplomats and African Union representatives.

"These were just the initial talks," presidential spokesman Isaiya Kabira said.

Opposition leader Raila Odinga and other officials of his Orange Democratic Movement (ODM) met Annan late on Wednesday, and agreed to call off protests planned for Thursday.

Earlier protests have erupted into rioting, looting and deadly clashes with police, whom opposition and rights groups accuse of using excessive force. Police deny that and say they only shot or tear gassed rioters and looters.

The opposition demanded an outside mediator to solve a crisis that has split Kenya down tribal and political lines, after Kibaki narrowly won the closest election in the east African nation's history in a December 27 vote rife with rigging.

Close to 700 people have been killed and 250,000 forced to flee their homes in a combination of ethnic killings fuelled by politics and police action.

The violence shattered Kenya's image as a stable, democratic country with the region's strongest economy, more known as a land of safaris and beaches than a conflict zone.

Its core tourism industry has already seen massive cancellations, with five hotels in the Indian Ocean resort of Malindi temporarily closing down.

Kenya's shilling currency hit an 18-month low on Wednesday, and dealers said political uncertainty would keep it depressed.

Diplomats hope Annan can bring about a power-sharing deal between Kibaki and Odinga. World powers have urged the two to sit down and many ordinary Kenyans are furious they have not in the face of the continued fighting.

ODM demanded international mediators, saying it has no faith in Kenya's courts or institutions -- especially the Electoral Commission of Kenya (ECK), which was internationally criticised for its handling of the tallying.

The ECK's December 30 announcement that Kibaki won amid claims of rigging on both sides, enflamed parts of the country already tense or breaking out in violence over the delayed tallying.

The government has been cool to outside mediation from the start, saying Kenya has more developed institutions than other African states that do need external help.