Kenya's ruling party and opposition could be just days away from a final political settlement to end post-election bloodshed, officials say. Ex-UN Secretary General Kofi Annan told reporters in Nairobi an agreement could be reached next week but that earlier reports of a deal had been premature. Analysts believe the development is significant and could lead to an eventual solution to the crisis. Some 1,000 people have died in clashes since the 27 December elections. Mr Annan said: "We are all agreed that a political settlement is needed, that a political settlement is necessary and we are working out the details of such a settlement." His comments followed the second face-to-face talks on Friday since the elections between President Mwai Kibaki and opposition leader Raila Odinga. President Kibaki's side said there had been an "agreement in principle", while the opposition spoke of a "positive development". The apparent breakthrough came as a policeman accused of shooting dead two protesters pleaded not guilty to murder at a court in Nairobi. Footage of Constable Edward Kirui confronting protesters in the western city of Kisumu in January had been broadcast on Kenyan television. Correspondents say there has been a shift in mood in the political process, and the deadlock appears to have been broken, making way for a new sense of optimism. Mr Odinga has previously rejected any suggestion of power sharing, while President Kibaki has insisted he is Kenya's duly elected leader. Speaking at a prayer service in Nairobi on Friday, Mr Kibaki said he was "encouraged by the commendable progress" in the peace talks. Government negotiator Mutula Kilonzo was quoted by Reuters news agency as saying: "We cannot afford our people using bows and arrows, people being pulled out of buses to be asked 'which language do you speak?' and then being chopped." Mr Kibaki was declared the winner of the election, which observers said was deeply flawed and the opposition Orange Democratic Movement claimed was rigged. More than 300,000 people were displaced in the ensuing violence as both sides traded accusations of ethnic cleansing. Mr Annan arrived in Kenya last month accompanied by ex-Tanzanian President Benjamin Mkapa and Graca Machel, wife of former South African President Nelson Mandela. UN under-secretary for humanitarian affairs John Holmes is due on Saturday to visit Kenya's Rift Valley, which has witnessed some of the worst violence in recent weeks. Source: BBC