Deal brings hope that Kenya's dark chapter is over

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President Mwai Kibaki and his rival Raila Odinga signed the deal setting up a coalition government on Thursday after a month of often bitter negotiations punctuated by riots and ethnic violence around the east African nation.

The two men had come under huge pressure from world powers and Kenya's 36 million people to find a solution to forestall more bloodshed and help repair the country's reputation as the region's business, tourism and transport hub.

As word of the deal spread, overjoyed residents danced, sang and ululated in the streets, while messages of praise and offers of help flooded in from overseas.

"The signing of the agreement is a shining example of how Africans themselves can find peaceful resolution to their political challenges," said South African President Thabo Mbeki.

South Sudan's leader Salva Kiir said more unrest and uncertainty could have destabilised the entire region.

"Now we again can recognise our neighbour Kenya," he said.

A U.S. State Department spokesman applauded the deal, adding: "We want to see this agreement implemented."

He said Washington would be watching carefully and Kenyans who promoted bloodshed still faced potential U.S. visa bans.

The deal was a major breakthrough for mediator Kofi Annan, who had suspended stalled negotiations on Tuesday in frustration and demanded the two leaders end the standoff themselves.

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