Kenyan President Mwai Kibaki and opposition leader Raila Odinga signed a power-sharing agreement today intended to end the post-election crisis.
Onlookers clapped as the two rivals signed a deal at a televised ceremony creating a coalition government following negotiations mediated by former UN chief Kofi Annan.
The two leaders had come under pressure to compromise over Mr Kibaki's disputed re-election on December 27th, which led to violence in which 1,000 people were killed and 300,000 fled their homes.
The crisis also severely damaged Kenya's reputation as a stable economic regional hub.
The agreement involves the creation of a prime minister's post for Mr Odinga and ministerial positions reflecting the rival parties' strength in parliament. Portfolios would be balanced along the same lines, Mr Annan said.
"Compromise was necessary for the survival of this country," he said after the signing. "I commend all those whose efforts have made this possible . . . they kept the future of Kenya always in their sights and reached a common position for the good of the nation."
African Union chairman and Tazanian President Jakaya Kikwete also praised the parties. "I salute the people of Kenya on this historic occasion," he said.
Today's talks brought Mr Odinga and Mr Kibaki to the same table for the first time in a month, after discussions between their parties hit a deadlock earlier in the week.
The opposition had threatened to hold mass street protests today but called them off after meeting Mr Annan.
The crisis broke out after Mr Kibaki was sworn in on December 30th, and Mr Odinga claimed the election was rigged, a charge the president denied.