Ukraine's President Viktor Yushchenko

Ukraine's staunchest political foes - President Viktor Yushchenko and former Prime Minister Viktor Yanukovych - are reported close to agreement on a political compromise that could allow the formation of the country's next government. The two leaders have agreed on the need for a national unity pact, laying out Ukraine's future course, after days of talks in Kiev.

Latest reports indicate that a working group is expected to present the final draft of the national unity pact to President Yushchenko as early as Tuesday. After he has examined it, the president is then expected to set a date for a meeting of coalition parties to discuss the document, with the aim of eventual endorsement.

The difficult negotiations over the unity pact have essentially focused on two things: President Yushchenko's desire to ensure that Ukraine's bid to join NATO goes forward and that his pro-western reform course is continued.

Viktor Yanukovych, July 25, 2006

The conditions put Yanukovych - who hails from the pro-Russian east of Ukraine - in a tight spot. Supporters of his Party of Regions largely returned his faction to power on the strength of its pledges to fight NATO enlargement and align the country more closely with Russia.

But, as Kiev-based independent analyst Ivan Lozowy points out, President Yushchenko may be holding the last card.

"Yes, he has the joker, or nuclear option, which is the dissolution of parliament," he said. "But it is the nuclear option because it would probably take out [President] Yushchenko with it. Namely, his party, Our Ukraine, will fare much worse than they did several months ago in the general elections."

At the same time, analyst Lozowy points out that, although an agreement on the national unity coalition would be a step forward, he says it does not mean an automatic end to the crisis.

"This will be a sign that they are ready to come to some form of agreement on the main issue - who is the prime minister and who gets other government posts," he said. "It won't be a guarantee that there will be agreement. But it will be stepping back from the brink of a very serious confrontation, including the possibility of parliaments dissolution, new elections, and so forth."

Lozowy and other analysts agree the accord would also represent a significant compromise for Yanukovych, who is hoping to secure the presidents approval for his nomination to be prime minister.

The post comes with increased powers, once belonging to Ukraine's president, which is why Mr. Yushchenko has pushed so hard for an agreement laying out Ukraine's future course. Meanwhile, the president faces yet another looming deadline, having said he would choose a new prime minister by August 1.

Barring agreement, President Yushchenko could still decide to dissolve parliament and call new elections or let this deadline pass without comment, as he did with a similar one last week, further extending Ukraine's political uncertainty, now entering its fifth month.