Government and opposition negotiators failed to reach a breakthrough on a power-sharing deal, prompting mediator Kofi Annan to suspend the talks while he consulted President Mwai Kibaki and opposition leader Raila Odinga.

"The talks have not broken down," Annan told reporters. "But I am taking steps to make sure we accelerate the process and give peace to the people as soon as possible."

Rice, who is on a trip to China, said that while there had been some progress, "I am disappointed by the failure of leadership necessary to resolve all the remaining issues."

She added: "I want to emphasise that the future of our relationship with both sides and their legitimacy hinges on their cooperation to achieve this political solution.

"In that regard, we are exploring a wide range of possible actions. We will draw our own conclusions about who is responsible for lack of progress and take necessary steps."

She did not elaborate.

Rice, who visited Kenya earlier this month to urge progress, said the United States would also "exercise leadership" to press for a political solution through the United Nations, the African Union and the European Union.

Both Kenyan leaders have come under international and domestic pressure to compromise over Kibaki's disputed re-election in a December 27 vote, an event that triggered ethnic violence in which 1,000 people have been killed and 300,000 forced to flee their homes.

"SOME AGREEMENT"

Tanzanian President Jakaya Kikwete was due to arrive on Wednesday in his capacity as African Union chairman to talk with Odinga, Annan and Kibaki.

Mediator Annan, the former U.N. secretary-general, is ready to leave Kenya if there is no progress soon, according to a source close to the talks.

The opposition has said it will stage nationwide protests beginning on Thursday if there is no deal. Police had no comment on whether they would permit the demonstrations.

Musalia Mudavadi, a senior opposition leader, refused to rule the protests out after the talks were suspended.

"That will be a subject for another day," he told reporters.

A top official of Kibaki's party said the protest call was not in the interests of the Kenyan people.

"When you say mass action the message that people hear is war. There has been enough suffering," said Danson Mungatana, Secretary General of the Party of National Unity.

Earlier protests descended into riots and looting that were met with a deadly police response, while simultaneous rounds of ethnic killings and revenge attacks took place in different parts of the east African country.

The bloodshed damaged Kenya's reputation as a prosperous trade and tourism hub and a haven of stability in a volatile region.

Against this background of violence, the government has agreed in principle to create a prime minister's seat demanded by the opposition.

But the parties are split on the premier's powers, the sharing of ministries and the possibility of a new election if the coalition collapses.