By Agencies

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The parliamentary faction of Yulia Tymoshenko, Ukraine's prime minister, has claimed widespread fraud in the country's presidential election and said it would challenge the result in court.

Serhiy Sobolev, a member of the Tymoshenko bloc, told a meeting on Tuesday that Sunday's vote "displayed a cynical violation of Ukranian law" by the teams of Viktor Yanukovych, who led polls by a narrow three per cent.

"Consequently, the Tymoshenko bloc announces that we will defend in the courts our right, and the rights of our citizens, to honest and transparent elections," the Reuters news agency quoted him as saying.

According to local media, Tymoshenko has refused to concede defeat and told officials that she will "never recognise" the legitimacy of the election.

But Ukrainskaya Pravda, an online newspaper, said a significant section of her party, including the deputy parliament speaker, were hoping to persaude the prime minister to acknowledge Yanukovych's victory.

Official election results on Tuesday showed Yanukovych winning 48.94 per cent of the vote and Tymoshenko with 45.48 per cent, with 99.94 per cent of the ballots counted.

'Honest choice'

Tymoshenko and her aides had alleged significant violations by the Yanukovych camp in the run-up to the vote and the prime minister had warned of mass protests if she detected fraud.

However, her party has made no mention of holding demonstrations since the election results were announced.

Thousands of Yanukovych supporters have rallied outside Ukraine's central election commission in a bid to protect the result of the election.

"We want Yanukovych to make our life better, that he comes to power and improves our lives," a woman from Kiev, Ukraine's capital, told Reuters.

"We want to protect the honest choice of the people, we are standing here for Viktor Yanukovych, Viktor Yanukovych is our president," another woman said.

A legal challenge to the narrow margin of victory could deny Ukraine a swift return to stability and rattle financial markets.

The country of 46 million people has been battered by the economic crisis and badly needs to restart talks with the International Monetary Fund on a $16.4bn bail-out package.

Political comeback

International observers praised Sunday's elections as "impressive" and the European Union said it was ready to work with Yanukovych.

Dmitry Medvedev, the Russian president, congratulated Yanukovych on his success in a phone call on Tuesday, the Kremlin said.

State-controlled media in Russia had watched the election closely, but had avoided taking sides.

The offical result signalled a remarkable comeback by Yanukovych, a 59-year-old former prime minister, who was disgraced after Russia declared him winner of a 2004 presidential election that turned out to be rigged.

The poll led to the "Orange Revolution" mass street protests which Tymoshenko co-led, resulting in his victory being quashed by a court and Viktor Yushchenko, his rival, being elected.