Leading local newspaper, the Daily Nation, feared the country was on "the verge of a complete meltdown". Fuel prices shot up in Uganda, South Sudan, Rwanda and Burundi, all of which get fuel and other products via Kenya's ports.
THOUSANDS FLEE
Police were out in force in the capital on New Year's Day, and Nairobi's streets were initially quieter, before violence erupted in the slums again as night fell.
Washington first congratulated Kibaki, then switched to expressing "concerns about irregularities".
Former colonial power Britain, the European Union and others pointedly avoided congratulating Kibaki.
They expressed concern, urged reconciliation and a probe into suspected voting irregularities.
"The 2007 general elections have fallen short of key international and regional standards for democratic elections," the EU observer mission said in its formal assessment.
Western diplomats shuttled between both sides, trying to start mediation. British Prime Minister Gordon Brown called Kibaki and his opposition rival Raila Odinga.
"The government thinks they can wait this out, but we're not convinced," one diplomat in Nairobi told Reuters.
The Eldoret area where the church massacre took place is multi-ethnic but traditionally dominated by the Kalenjin tribe.
It suffered ethnic violence in 1992 and 1997 when hundreds of mainly Kikuyus were killed and thousands more displaced.
A senior security official in Rift Valley said that as many as 15,000 people were now sheltering from the violence in churches and police stations in Eldoret.
He blamed the opposition for incitement.
"We have lived together for years, we've intermarried, we have children, but now they've asked them to turn against them," the security official said. "We don't do this in Kenya. It is what happens in Yugoslavia and Sudan."
An Irish Catholic priest in Eldoret, Father Paul Brennan, told Reuters vigilante gangs were roaming the streets.
"Houses are being burned. It is too dangerous to go outside and count the dead," he said. "The churches are full. There are four to five thousand in the main cathedral."
Most deaths have come from police firing at protesters, witnesses say, prompting accusations from rights groups and the opposition that Kibaki had made Kenya a "police state".
