Addressing a sea of roaring supporters, Europe-friendly opposition chief Viktor Yushchenko said he had presented his Moscow-leaning rival with an ultimatum: Approve a new presidential vote or face action on the streets.

Yushchenko, who is widely regarded as the winner of the presidential vote last Sunday, called for a new election on December 12.

"We will allow only a few days for the negotiation process. If (Prime Minister Viktor) Yanukovych wants to drag things out, we will take active measures," he told a crowd of tens of thousands in Kiev's Independence Square following Friday's talks which also involved European mediators.

"We insist on the following,” he said. “The main precondition for the talks is the holding of new elections for the president of Ukraine."

Ukraine's parliament was due to discuss the standoff at an extraordinary session scheduled for Saturday. "The Ukrainian parliament has to take political responsibility and evaluate the situation in the country, as well as the actions of the central election commission," parliament speaker Volodymyr Litvine had said.

Rival interests

Yushchenko's ultimatum came after a day of some of the most feverish street rallies since last Sunday's disputed run-off polls between the two men saw the official vote count go to the Moscow-backed prime minister, amid accusations of electoral fraud.

Outgoing President Leonid Kuchma put a brave face on a tense situation by reporting that some progress had indeed been made. "We stand against any use of force that might lead to an escalation of conflict and bloodshed," he read from a statement signed by the two rivals.

"To ensure the negotiation process, the parties established a working group in order to elaborate a joint decision on the settlement of the political crisis," Kuchma’s statement went on.

But Russia, which has openly backed Yanukovych and has been exchanging angry rhetoric with the European Union over the poll, has encouraged its preferred candidate to stick to the official results showing him the winner. The Kremlin has accused Brussels of trying to push its own western agenda in a country Russia has long considered a staunch supporter.

European Union foreign policy chief Javier Solana told reporters that he had made it clear to Ukraine's leadership that he believed the vote was fraudulent and that future relations between the two sides depended on a "democratic" resolution -- a clear statement of support for Yushchenko's demands.

Fellow mediator and Polish President Aleksander Kwasniewski, whose country borders Ukraine, called the talks "a good start, but added that "the road to a compromise is still very long.”

Yanukovych's power crumbling?

Friday's roundtable meeting and the parliamentarian debate could be the first signs that Ukraine's seat of power is crumbling.

Ukraine's national television news, which throughout the week has aired mostly positive coverage of Yanukovych, has begun to feature the opposition.

The Ukrainian supreme court on Monday is due to hear opposition claims that the state rigged the vote in favor of Yanukovych. Analysts have said its judges have shown independence in the past and may possibly back Yushchenko.

However Russia appears to be sticking to its guns after President Vladimir Putin put his own credibility on the line by twice visiting Ukraine during the campaign to back Yanukovych. Russian Foreign Minister Sergei Lavrov told reporters in Moscow that Europe was trying to pull its ally into the Western camp by dangerously and illegally fomenting opposition protests.

"We are alarmed by attempts by certain governments to steer the situation in Ukraine away from a legal path," Lavrov said. "Especially when certain European capitals are declaring that they do not recognize the elections and that Ukraine has to be with the West," he added.