Ukraine Awaits Tymoshenko Concession Or Legal Fight

KIEV (Reuters) - Ukraine waited for Yulia Tymoshenko Tuesday to contest a weekend presidential election or concede defeat and allow the winner, Viktor Yanukovich, to start piecing together a governing coalition in parliament.

Prime Minister Tymoshenko, the co-architect of the Orange Revolution that denied Yanukovich the presidency in 2004 after a rigged election, was due to give a news conference Tuesday.

She has so far ignored calls by international monitors to accept defeat and shake hands with the winner, whose election could draw the former Soviet republic back toward Moscow.

There was no mood in the snow-bound capital Kiev for a repeat of the 2004 street protests. But a legal challenge to the narrow margin of victory -- 2.8 percent with 98.4 percent of votes counted -- could deny Ukraine a swift return to stability.

The country of 46 million people has been battered by the economic crisis and badly needs to restart talks with the International Monetary Fund on a $16.4 billion bail-out package derailed by breached promises of fiscal restraint.

Tymoshenko cannot catch up with Yanukovich in the vote-count. Just under 600,000 votes separated the two sides, in a vote that underscored Ukraine's deep divide.

As votes trickled in Sunday evening, the 49-year-old former gas tycoon cried fraud but backed away from an earlier threat to call people out onto the streets.

"The temptation will be there for (Tymoshenko) to make a challenge," said Andrew Wilson, a senior policy fellow at the European Council on Foreign Relations.

But monitors declared the election an "impressive display" of democracy and urged a peaceful transition of power. There were no serious irregularities, they said.

Western investors and Ukraine's powerful neighbor Russia reacted cautiously to the victory of Yanukovich, whose party is allied to the Kremlin's United Russia.

Prolonged uncertainty over the outcome could further hurt Ukraine's sickly economy and delay the resumption of much-needed bail-out cash from the International Monetary Fund.

The official result signaled a remarkable comeback for Yanukovich, who tapped widespread disillusionment with the Orange Revolution democracy movement that delivered years of infighting instead of prosperity and stability.

A close Yanukovich aide said there were no back-stage contacts with Tymoshenko to strike a deal on a future alliance.

Yanukovich will instead be seeking to forge a coalition to get his own ally into the key role of prime minister, which could require support from the Our Ukraine faction of outgoing President Viktor Yushchenko. That is far from certain.

However, Yanukovich may need only some of the Our Ukraine faction to secure a workable majority.

Failure would force fresh parliamentary polls -- possibly as early as June although autumn is more likely -- but Yanukovich appears reluctant to call fresh polls for fear of voter fatigue.