NAKURU, Kenya - Fierce street battles erupted in a western Kenyan city Friday, leaving bodies lying on the ground with machete slashes and pierced with arrows, witnesses said.

At least 12 people were killed and hundreds of homes were burned down in the latest explosion of fury over a deeply flawed presidential election.

The violence broke out in Nakuru, the country's fourth largest city. Youths with bows and arrows threw cans filled with gasoline at homes, setting them ablaze, and fired illegal homemade guns. One victim was stoned to death, said a local newspaper reported who witnessed the killing.

As the violence raged, President Mwai Kibaki and opposition leader Raila Odinga remained far apart on the central question of who really won the Dec. 27 election.

The two rivals are under international pressure to find a way to share power. But Odinga said he was not interested in that option, insisting holding new elections was the only way to restore peace. Kibaki made clear he would not give up his position as head of state.

Soldiers patrolled the streets and military helicopters buzzed overhead in Nakuru, a city of 300,000 people that had until now been spared the political violence.

"I'm just happy because I'm alive," said Mary Kimani, 42, who joined hundreds of others in a Catholic church as homes outside were reduced to smoldering rubble. "I'm badly shaken and I don't know where to go."

Witnesses reported seeing at least 12 corpses in Nakuru.

Riots and ethnic fighting following Kibaki's disputed re-election have killed at least 685 people and forced 255,000 from their homes, with violence convulsing the capital, the coast and the western highlands.

Much of the fighting has pitted ethnic groups who support Odinga against Kibaki's Kikuyu people, who are resented for their long-running domination of politics and the economy.

The trouble in Nakuru, the provincial capital of the Rift Valley, began late Thursday when people heard Kibaki was insisting he was Kenya's "duly elected president," said Pastor Richard Nato of the African Faith Gospel Church

"Raila is our president. Kikuyus go out of Rift Valley," some armed men yelled. Then they whooped frightening war cries.

Sospeter Njenga, a bishop at the Pentecostal Christian Church, said he saw eight corpses in the town.

"I ran home and got my official gown and collar," Njenga said. "When you wear this, they cannot attack you. I have been here 27 years, and I have never seen anything like this."

Outside his church, he said Kikuyu men would be posted Friday night to protect the women and children taking refuge inside.

"We mobilized our young men," the bishop said. "Unfortunately we have no weapons."

A dusk-to-dawn curfew was imposed in the town, Abdi Shakur of the Kenya Red Cross Society confirmed.

One battle in the west of Nakuru left a dozen people lying in the street, some with deep cuts to their heads, others with arrows lodged in their chests and backs, according to a local newspaper reporter who saw the fighting. It was not clear whether the victims were dead or injured.

Police tried to talk to the aggressors, then fired in the air to halt the fighting.

A second local newspaper reporter said she saw two people killed Friday morning -- a man carrying beans to the market who was stoned to death at the main bus station, and a man stabbed near the town's well-known Okilgei bar, which was looted.

She also said she saw at least two other bodies in a police truck at Nakuru's Kaptembwa slum -- one person who had been hacked to death and the other struck by an arrow in fighting overnight.

Scores of people streamed from the slum, some balancing bundles of belongings on their heads, walking in the direction of the city center where more clashes were erupting.

In Nakuru's industrial area, plumes of smoke and flames burst from a two-story veterinary supply store. A gas station in the area was also on fire.

Soldiers and police looked on, helpless. The city's only fire engine was set ablaze earlier in the day.

The medical superintendent at Nakuru Hospital, George Mugenya, said it was too early to give a death toll.

"The dead bodies and injuries are coming in. I cannot give you a figure now."

On Thursday, Kibaki and Odinga held talks for the first time since the election, with former UN Secretary-General Kofi Annan as mediator. Immediately afterwards, Kibaki made clear his position as president was not negotiable.

International allies have been urging a power-sharing agreement that might create a new position of prime minister for Odinga. But in an interview Friday with National Public Radio, Odinga said he had ruled out that option, insisting Kibaki must either step down or allow new elections.

"Presidential elections ... will settle this issue once and for all," Odinga said. "Kenya is aflame, and there'll be no peace in Kenya until this matter is settled satisfactorily."

He also denied allegations by New York-based Human Rights Watch that opposition party leaders were organizing ethnic attacks in the Rift Valley.

"What we have seen countrywide has been a spontaneous reaction of the people to the rigging of the elections," he said.

Democratic presidential hopeful Barack Obama, the Illinois senator whose father was Kenyan, urged both sides to compromise.

"President Kibaki must permit the opposition meaningful participation in the government," Obama said in a statement. And Odinga "must seek a peaceful resolution and reject violent protest and disorder."

On Friday, the opposition said Kibaki should not be allowed to send a delegation to an African Union summit planned next week in neighboring Ethiopia because "Kibaki's government is not the legitimate government."

But Vice President Kalonzo Musyoka rejected that argument.

"The matter of the legitimacy of the government is not in doubt whatsoever."

Elsewhere in the Rift Valley overnight, half the town of Total Station was burned down and at least two people were killed and 50 wounded by clubs and machetes, the secretary-general of the Kenya Red Cross Society, Abbas Gullet, said Friday.

Aid workers said that violence involved Kikuyus and Kalenjin.

Gullet showed film of people fleeing for safety to a mosque and police station with columns of flames and black smoke rising in the background.

Gullet said up to 50,000 people had fled their homes in recent days in other Rift Valley clashes around Molo, 160 kilometres northwest of Nairobi.

The police commander there, Achesa Litabalia, said Kikuyus attacked Kalenjins near Molo overnight and three of the attackers were killed.

His and Gullet's accounts indicated that Kikuyus previously attacked by Kalenjin are seeking revenge.

But a Kikuyu man in Nakuru, who gave only his first name, David, said police were preventing his tribe from taking revenge.

"Tell the police of Kenya to leave us to fight these people," he said. "We will defeat them and the war will end."