NAIROBI, Jan 12, 2008 (AFP) - Kenya's feuding factions came under fresh diplomatic pressure Saturday to give mediation another chance, after the opposition threatened mass rallies to protest disputed presidential polls.

UN chief Ban Ki-moon warned President Mwai Kibaki and opposition leader Raila Odinga, who claims he was robbed of the presidency in the December elections, that the absence of a negotiated solution would be disastrous.

'The potential for further bloodshed remains high unless the political crisis is quickly resolved,' Ban said in a statement.

His predecessor at the UN, Kofi Annan, who was expected in Kenya to take over mediation efforts from Ghanaian President and African Union chairman John Kufuor, also appealed for restraint.

He called on 'all Kenyan leaders, government as well as the opposition in the country, to avoid any measures or steps that would further compromise the search for an amicable solution to the country's crisis.'

On Friday, Odinga's Orange Democratic Movement (ODM) called for three days of mass rallies across the country, starting Wednesday. The protests were promptly banned by Kenyan authorities.

The announcement set up a fresh showdown between opposition protestors and police, barely two weeks after Kibaki's re-election triggered a wave of clashes and tribal killings that left at least 600 people dead and a quarter of a million displaced.

'Police think it is not appropriate at this time,' police chief Major General Mohamed Hussein Ali told journalists, shortly after ODM called for demonstrations in some 30 towns across the country.

Odinga cancelled previous protest plans as international envoys toiled to broker a political settlement, but when African Union-mediated talks ended in failure on Thursday, the ODM reverted to its initial strategy.

Mediators had hoped to clinch a power-sharing deal following the dispute over the December 27 polls, which sparked claims of rigging from the opposition and widespread international concern.

But Kibaki has pressed on with his agenda, taking the oath as president less than an hour after the electoral commission announced the result on December 30 and naming a partial cabinet earlier this week.

The 76-year-old Kibaki, who is Kenya's longest serving parliamentarian, described the cabinet line-up as 'broad-based' and appointed opposition presidential candidate Kalonzo Musyoka as vice president.

But ODM charged the cabinet was 'a joke' and labelled Kibaki 'an eminent thief' who was running away with a stolen election.

No foreign power has come out strongly against Kibaki, with mediation efforts focusing on urging Odinga to rein in his supporters and guarantee that violence will not flare up afresh.

Washington, whose top Africa diplomat Jendayi Frazer has spent more than a week in Kenya to find a solution to the crisis, was expected to step up the pressure on both sides to avert further unrest.

Washington will 'be pushing people to get serious with talks started by the Ghananian leaders,' a US diplomat told AFP.

Kenya was once considered a beacon of democracy and stability in East Africa and the latest crisis has rattled the country's image and its economy.

Meanwhile, the UN warned Friday that half a million people in Kenya would need humanitarian assistance in the coming weeks and months.

The tourism industry, Kenya's main source of foreign currencies, has been badly hit, with 90 percent of January bookings cancelled.

While a lull in the violence has allowed road transport companies to resume deliveries to the entire region, experts fear that Kenya may lose future investments if political instability remains.