President Yushchenko’s Our Ukraine Party suffered major setback in 26 March legislative elections, receiving just 14% of vote according to preliminary results. Yanukovych’s pro-Russian Party of the Regions led with 32%, while Tymoshenko’s bloc followed with 22%. OSCE and EU observers praised election for democratic standards. Pro-Russian Ne Tak bloc announced it had 4.5 million signatures for referendum against future NATO membership 1 March. Ukraine said 10 Uzbek asylum seekers deported in February had links to al-Qaeda.

President Yushchenko called for new constitution in annual address to parliament. In apparent reaction to his pro- NATO drive, parliament voted down bill allowing foreign troop exercises in Ukraine. Russia told to increase rent payments for stationing its Black Sea fleet in Crimea. UN condemned deportation of 10 asylum-seekers back to Uzbekistan.

Repercussions of gas dispute with Russia spread to domestic politics. Parliament voted 10 January to dismiss government over 4 January gas price deal with Russia. President Yushchenko challenged constitutionality of vote. Parliament then voted to cancel deal and dismiss ministers involved. Month ended with uncertainty as Yushchenko refused to recognise government dismissal and signing of deal delayed. Bilateral tensions over the Crimea increased after Ukrainian officials took possession of Russian-operated lighthouse in Yalta 13 January. Trial of 3 former policemen charged with 2000 murder of journalist Georgiy Gongadze began 9 January; adjourned until February.

Relations with Russia soured by ongoing dispute over gas prices. Moscow cut supply to Ukraine 1 January after negotiations failed to resolve dispute over price rise by Russian supplier Gazprom, perceived as response to Ukraine’s pro- Western stance. Pro-Russian opposition held rally to protest Ukraine’s goal of joining NATO and EU. In Kiev visit U.S. Sec. State Rice praised government, urged further reform.

Controversy over position of prosecutor-general continued: parliament approved President Yushchenko’s nominee, Oleksandr Medvedko, but Kiev court ruled dismissal of previous prosecutor-general illegal and reinstated him. FM Tarasyuk accused Russia of violating terms of its Black Sea fleet presence at Ukrainian port.

President Yushchenko pledged to devolve power to PM and parliament after months of political turmoil. New PM Yekhanurov held first cabinet meeting, visited Brussels to discuss reforms. NATO Sec. Gen. de Hoop Scheffer discussed NATO membership bid. EU signed agreement with Moldova and Ukraine to aid anti-smuggling efforts.

Political turmoil deepened as President Viktor Yushchenko sacked PM Tymoshenko and cabinet 10 September amid infighting and accusations of corruption. Parliament approved president’s new candidate for prime minister, Yuriy Yekhanurov, 22 September, after initial rejection. Yushchenko named new cabinet primarily of technocrats. Investigations found no evidence supporting allegations of corruption against certain top officials. Parliamentary commission investigating murder of opposition journalist Heorhiy Gongadze concluded former President Kuchma organised his abduction.

Rivalry between President Yushchenko and PM Timoshenko reportedly delaying much-needed reforms. Yushchenko ordered disbandment of traffic police, one of country’s most corrupt institutions, and replacement of regional police chiefs.

NATO Secretary General Jaap de Hoop Scheffer visited Ukraine 27 June to discuss reforms necessary for NATO and EU accession. Separately, government said would move ahead with mass privatisation of state-owned companies.

President Yushchenko’s first 100 days in office marked by developing tension wtih PM Tymoshenko. President issued decree criticising government’s fuel policy 19 May, including attempts to freeze fuel prices and ban exports in face of oil shortages Tymoshenko blames on Russia. President promised any future entry to NATO or EU would be subject to national referendum.