"I have decided to put forward the candidacy of Viktor Yanukovych for the post of prime minister," Yushchenko told journalists.

"I understand all the difficulties this will involve... but we have a unique chance to unite the two banks of the River Dnepr," he said, referring to a political divide between eastern and western Ukraine accentuated by the recent crisis.

"We have a good chance to escape the political war and pass to political competition," Yushchenko said.

He said a pact agreed with Yanukovych's pro-Russian Regions party would be signed later Thursday and would ensure that the country kept to its current pro-Western course.

"Concerning the principles determining Ukraine's domestic and foreign policy, its continuity, we have made a full stop today. I am sure that there will be no more discussions," he said.

The announcement came after weeks of tortuous negotiations among the parties elected in March.

Regions won the most seats at the elections, picking up support in the pro-Russian east of the country and opposing Yushchenko's plans for Ukraine to join the North Atlantic Treaty Organisation (NATO).

But it failed to gain an overall majority.

As coalition talks got under way, Yushchenko sought guarantees from Yanukovych that he would not drop the pro-Western principles of the 2004 popular uprising known as the "orange revolution", in which mass protests overturned a presidential election bid by Yanukovych.

Following Yushchenko's announcement there were no immediate comments from Regions on how it planned to cooperate with Yushchenko. The Ukrainian leader himself gave no details on the likely distribution of cabinet seats.

Regions earlier said it would form a coalition with Socialist and Communist deputies that would give it 240 out of the 450 seats in parliament, leaving no role for Yushchenko's Our Ukraine.

It had threatened to impeach Yushchenko if he followed through on threats to dissolve parliament.

Thursday's talks had extended beyond a constitutional deadline for Yushchenko to decide either to approve Yanukovych's candidacy or dissolve parliament.

Under the constitution the president had 15 days to decide whether to nominate a candidate after receiving a formal proposal, which Regions presented on July 18.

Yushchenko's decision was all the more momentous as the prime minister will take on extra powers under constitutional changes that were agreed in the course of resolving the "orange revolution".

Yanukovych, a 56-year-old former electrician from Ukraine's industrial east, was long associated with former president Leonid Kuchma, serving as his prime minister between 2002 and 2004.

He was Kuchma's anointed successor at the presidential election that year that sparked the "orange" protests due to accusations by observers of vote-rigging.

Hundreds of thousands of people participated in the peaceful protests against the presidential election result, eventually forcing Yanukovych to back down.

In the recent negotiations Yushchenko's glamorous "orange revolution" ally, Yulia Tymoshenko, opposed a return to power by pro-Russian forces, saying it would be better to dissolve parliament than "betray" those who came onto the streets.

The idea of Ukrainian membership of the European Union and NATO has prompted consternation in Moscow, which has long considered Ukraine part of its sphere of influence.

The political divide had already affected efforts to join NATO, as alliance members cancelled military exercises on the Crimean Peninsula in June following protests there.

But despite warnings that the crisis could deter much-needed investment, the economy has picked up recently.

Gross domestic product grew by an average of five percent for the first six months of this year, according to the state statistics committee.

Songkhla is next to Thailand's three insurgency-torn provinces where around 1,400 people have died since January 2004 in separatist attacks and other unrest.

In Pattani province, a soldier was killed instantly by a bomb while working at the site of a new school which was under construction.

The attacks came a day after a string of 97 coordinated bomb and arson attacks across the region along the southern border with Malaysia late Tuesday that injured at least three people.

Tuesday's attacks, the largest in more than a month in the restive south, targeted the homes of police and government officials, karaoke bars and a train station, officials said.

Only four people have been arrested in connection with the attacks, army Colonel Somkuan Seangpattaranetr said.

Most only caused minor fires, with the exception of a rubber factory in Pattani province that burned for more than two hours.

"The latest attacks showed militants remain capable of launching coordinated attacks against the government," said Sunai Phasuk, a Thai consultant at Human Rights Watch.

"They also undermined the government's claim that they were making progress. In fact, the situation is getting worse," Sunai said.

The three provinces were an ethnic Malay sultanate until Buddhist Thailand annexed them a century ago, and separatist unrest has simmered ever since.

The latest violence erupted in January 2004. Officials say the bloodshed includes not only separatist violence but also fighting tied to organized crime, smuggling and local corruption.

The government of Prime Minister Thaksin Shinawatra has tried to quell the insurgency but analysts have said that heavy-handed tactics have instead brought the opposite results.

"The government should stop its aggressive policy. Instead of relying on the military, the government should conduct more dialogue" with local people, said Srawut Aree, a senior researcher at Chulalongkorn University.

Chaichana Ingkawat, a political science professor at Ramkhamhaeng University, said he saw no quick end to the raging violence.

"Insurgents keep disturbing security in the region because they just want to express their frustrations with the government," Chaichana said.

Last month the government again extended emergency rule in the three provinces of Narathiwat, Pattani and Yala for three more months. Thaksin imposed emergency rule in the south in July 2005.

Under emergency rule, authorities can detain suspects for up to 30 days without charge, search and arrest people without warrants and tap phones.

It also gives security forces broad immunity from prosecution, which human rights groups claim creates a climate of impunity.

In June a panel tasked with finding ways of ending the violence recommended that the government create a permanent body to mediate in the Muslim-majority region.

The independent National Reconciliation Commission, also said local government officials should use the Malay language spoken by most of the residents in the region.

But the government has backed away from those and other proposals.

"Mexico City belongs to everyone. All those who live here deserve to have their rights respected," said Ruben Aguilar, spokesman for President Vicente Fox, in a rare outburst.

The protests have been peaceful, but are angering residents and alienating some former Lopez Obrador supporters.

Lopez Obrador has apologized for the disruption, but insisted it was a small price to pay.

Speaking from a stage in the square, one of the world's largest, the former Mexico City mayor said he would decide whether to step up the campaign of civil disobedience after a court decision over a recount, which he expected within days.

"It causes annoyance, anger, we know that, but there is no other choice ... we have to make democracy count in our country," he said while adoring, screaming protesters mobbed him during a tour of their camps.

Calderon, who insists there was no fraud, urged calm in a primetime television call for peace.

"I have acted responsibly and not reacted to provocation, because I firmly believe in the power of the peaceful and because we won cleanly," he said.

HELP THE POOR

Lopez Obrador, who has promised ambitious welfare programs and infrastructure spending, has a loyal following in Mexico City, and among Mexico's poor.

"He has helped the poor," said Rafael Zuniga, who voted for Fox in 2000 but now backs Lopez Obrador and joined the occupation of Mexico City's business district.

He said some residents have hurled abuse at him and other protesters, who sleep on the ground on a main intersection, cook meals over a gas burner and have not bathed since Sunday.

"The people who go by in their cars are just fighting for themselves, for their own money, their own jobs. They are not looking out for anyone else," he said.

Critics call Lopez Obrador a rabble rouser.

"If this is what Lopez Obrador is like as a candidate, I don't want him to be president," said Victor Manuel Luna, the head of reception at a downtown hotel where occupancy has slumped since the protests began on Sunday night.

European Union observers say they found no evidence of fraud in the election, but Lopez Obrador says he has evidence vote returns were tampered with.

He wants the electoral court to order a full recount. The court has until August 31 to decide, meaning the political deadlock could drag on for at least another month.

Calderon's lawyers said they expect at least a partial recount but are confident the results will clearly favor them.

The new president will take office on Dec 1. Fox, whose election victory in 2000 ended seven decades of one-party rule, was barred under Mexico's laws from standing for re-election.

It was not the first time Malloch Brown had been outspoken in his criticism, prompting State Department spokesman Sean McCormack to say on Wednesday, "We are seeing a troubling pattern of a high official of the U.N. who seems to be making it his business to criticize member states and, frankly, with misplaced and misguided criticisms."

As deputy secretary-general since April, Malloch Brown is an old acquaintance of Annan, who asked him to leave the
World Bank in 1999 and take over the U.N. Development Fund.

Annan's 10 years as secretary-general ends on December 31, 2006, and Malloch Brown's tenure with it.

A former Economist magazine journalist and Cambridge University graduate, Malloch Brown is considered one of the most politically savvy and media-friendly officials at the
United Nations.

In January 2005, Annan made Malloch Brown his chief of staff in part to counter growing complaints of corruption in the oil-for-food program for Iraq.

A month later Malloch Brown forced out Ruud Lubbers, then head of UNHCR, after complaints of alleged sexual harassment but then had frequent disputes with the U.N. staff union.

In June he clashed with the United States, accusing the U.S. government of relying on the United Nations as a diplomatic tool in hot spots but refusing to defend it against conservative criticism at home.

U.S. Ambassador John Bolton then called the comments the "worst mistake by a senior U.N. official that I have seen in that entire time."

"The development of Taepodong-2 is conducted jointly with Iran, and it is possible China's technology is used in the development of the Taepodong-2 engine," said the IFANS report, which Reuters obtained on Thursday.

The collaboration is part of an international network, including Pakistan, that made it possible for the impoverished North to develop and deploy missiles despite scarce resources and limited testing, the study said.

North Korea fired seven missiles on July 5, including the long-range Taepodong-2, which U.S. officials said failed seconds into its flight and fell into waters between Japan and the Korean peninsula.

Christopher Hill, the top U.S. envoy to talks on the North's nuclear program, said last month one or more Iranians watched the North's missile launch, deepening concerns about the ties between two countries with troubling nuclear capabilities.

The Taepodong-2 is the product of joint efforts with Tehran, coinciding with Iran's development of the Shehab-5 and 6, and "it is highly possible that design and technology from China, which has an arms trade with Iran, were used", the report said.

The North is building a missile command base 50 km (30 miles) north of the Demilitarized Zone for as many as 30 mobile launch pads for the short-range Scud-type Hwasong missiles that can hit military and industrial targets deep in the South, IFANS said.

"With the deployment of Rodong and SSN-6 missiles and the pursuit to deploy the Taepodong-2, the North is pushing ahead with the construction of new sites and silos" on the east coast and on the border with China, the IFANS report said.