Ukraine's leading English-language newspaper since 1995

Ukrainian lawmakers have forged a three-party governing coalition, a top legislative leader said Tuesday, ending months of deadlock that paralyzed the country amid its worst financial crisis in a decade.

The new coalition puts back together the fractured alliance of President Viktor Yushchenko and his rival Prime Minister Yulia Tymoshenko along with another smaller party.

The announcement was made by Volodymyr Lytvyn, the shrewd former parliament speaker who played an important role during the 2004 Orange Revolution. He was re-elected as parliament speaker on Tuesday evening.

Lytvyn said a formal coalition agreement would be signed in the next several days, but that the three parties have already handed him statements saying they intended to work together.

Yushchenko's party, however, issued a statement later saying the alliance had not yet been formally created. Another party member also said the announcement was premature but talks were going well.

Yushchenko's office declined to comment.

Even if the alliance takes force, it is likely to offer only temporary relief to Ukraine's chronic political turmoil because it reunites the country's two warring leaders.

Parliament's biggest faction, the opposition Party of Regions, is left out of the coalition and is expected to renew calls for a new government or early elections, capitalizing on the hardships now facing Ukrainians.

Ukraine's economy is struggling mightily amid the global credit crunch. Output of steel, the nation's key export commodity, fell by half due to sinking global demand. As a result, the national currency, the hryvna, has shed over 46 percent of its value since the start of the year.

Thousands of workers across the country face layoffs and the government hopes that a $16.5 billion loan by the International Monetary Fund will help avoid an all-out collapse.

Yushchenko and Tymoshenko's governing coalition collapsed in September when Tymoshenko backed plans to trim presidential powers and the two disagreed over how to respond to Russia's war with Georgia.

The two leaders of the Orange Revolution have become bitter rivals and are expected to face off in the presidential election likely to be held in early 2010.

Tuesday's decision paves the way for complicated talks on dividing up government duties, since Lytvyn's loyalists are also vying for Cabinet seats. They have 30 days for the negotiations, but Lytvyn indicated that Tymoshenko should stay on as premier.