Negotiations aimed at resolving Kenya's political deadlock are showing signs of progress, as the government and opposition party discuss a power-sharing arrangement built on the creation of an office of prime minister.  Derek Kilner reports from Nairobi, where negotiators say they expect an agreement to be reached in a few days.

Government negotiator Mutula Kilonzo told reporters the government had agreed to the creation of an office of prime minister, but that the powers the office would hold have not been worked out.

The creation of the prime minister position has been a key demand of the opposition Orange Democratic Movement, whose leader Raila Odinga would likely take the job.

President Mwai Kibaki's team had earlier said any power-sharing arrangement must follow the current constitution, which would not allow a prime minister.  The government appears to have relented on this position, though it remains unclear what level of power it would accept for the office.  The opposition has called for the prime minister to share executive powers with the president.

Speaking outside the negotiations, which are set to resume Friday, Kilonzo said he expected an agreement would be reached in the next few days.

"I think at the very latest by the end of the weekend.  We have resolved that if we do not finish tomorrow, we work over the weekend.  Even if you have looked at my friends from ODM ... walking out, they have been walking with a smile, everybody has a smile," Kilonzo said.

Former U.N. Secretary-General Kofi Annan, who is leading the mediation effort, issued a statement saying he is "beginning to see light at the end of the tunnel."  There have been previous moments during the negotiations when a deal had seemed imminent, but failed to materialize. The mediation effort is in its third week.

Even if a solution is reached soon, Kenya will still face a challenge in avoiding a return to the unrest that killed some 1000 people following a disputed presidential election on December 27.

The International Crisis Group, a Brussels-based analysis organization, released a report saying negotiations aimed at tackling the broader issues underlying the violence - including economic policy, constitutional reform, and the disbandment of militias - must begin immediately.