Kenyan police fired teargas and water cannon on Thursday at thousands of anti-government protesters chanting "Peace" and singing the national anthem as they tried to march to a banned rally.

"This is dictatorship now," protester Julius Akech shouted, in the latest bout of unrest in a week of tribal and political violence in which more than 300 Kenyans have been killed.

Opposition leader Raila Odinga vowed to defy police and go ahead with the rally against President Mwai Kibaki's disputed re-election in Kenya, East Africa's biggest economy and a key ally of the West in its efforts to counter al Qaeda.

Thousands poured out of the pro-opposition Kibera slum and other shanty towns after dawn to head for Nairobi's Uhuru Park, or Freedom Park in Swahili, for the planned million-strong rally that Kibaki's government has banned.

When they were stopped by riot police, some protesters -- wearing white scarves, waving leaves and singing the national anthem -- sat in streets, blocking traffic.

Police used teargas and water cannon. They also fired in the air as, in one case, the crowd kneeled, shouting "Kill us all."

Each side has accused the other of genocide in a week of violence that has shocked world leaders and choked supplies of fuel and other goods to a swath of central Africa.

There have been international calls for reconciliation in a nation that had become known as a vibrant democracy and peacemaker in Africa, rather than a trouble spot.

Calling Kibaki a "thief" who had carried out "a civilian coup", Odinga told reporters he would, however, accept international mediation and proposed setting up an interim power-sharing government to prepare for a re-run of the vote.

"It should last no more than three months," he said.

"The people will not take this vote-rigging by the government lying down."

In rural areas, the unrest has touched off deep ethnic tensions. In an area where 30 members of Kibaki's Kikuyu tribe were killed in a church set on fire by a mob, young men with machetes manned roadblocks and hunted for their enemies.

TOURISM, ECONOMY HIT

The turmoil was likely to hurt tourism, Kenya's biggest earner worth about $800 million (403 million pounds) a year.

It has already hit financial and commodity markets in the tea- and coffee-growing nation.

The shilling currency dropped to a six-week low. Stocks also fell, while commodities auctions were postponed.

A local and an international rights group said many of the dead were victims of "bloody repression" of opposition protests.

Kikuyus, long dominant in politics and business, were targeted in initial clashes but revenge killings -- including some by the Kikuyu militant gang Mungiki -- are on the rise.

The government said "well-organised acts of genocide and ethnic cleansing were well planned, financed and rehearsed" by Odinga's Orange Democratic Movement ahead of last week's vote.

The opposition accused the government of acts "bordering on genocide" by ordering police to shoot protesters.

Observers said the vote fell short of democratic standards.

Uganda's President Yoweri Museveni became the first African leader to send congratulations to Kibaki.

Silence by most of the continent's leaders has underlined concerns about alleged rigging.

The only other country to congratulate Kibaki has been the United States, within hours of his swearing-in on Sunday. But since then, U.S. officials have pointedly declined to repeat that endorsement and instead expressed concern.

Kenyan media united in pleas for peace, with every major newspaper running the same front-page headline: "Save Our Beloved Country".

"Kenya is a burnt-out, smouldering ruin. The economy is at a virtual standstill and the armies of destruction are on the march," said the Nation.

"In the midst of this, leaders -- who are the direct cause of this catastrophe -- are issuing half-hearted calls for peace, from the comfort of their hotels and walled homes in Nairobi, where they are conveyed in bullet-proof limousines."

International efforts to mediate have been stepped up.

U.S. Secretary of State Condoleezza Rice was phoning Kibaki and Odinga to urge both to "do everything they possibly can in the name of political reconciliation", a spokesman said.

South Africa's Nobel Peace Prize laureate Archbishop Desmond Tutu was due to meet the head of Kenya's electoral commission on Thursday. Ghanaian President John Kufuor was waiting to talk to Kibaki before deciding whether to visit Nairobi himself or send a team.