"Today we reached agreement in principle on holding early elections," Yushchenko said after meeting with Yanukovych in Kiev, the president's office said in a statement.

Ukraine has been locked in crisis since April 2 after Russian-backed Yanukovych defied an order from pro-Western Yushchenko to dissolve parliament and hold early elections.

Addressing several thousand supporters on Independence Square in central Kiev, Yanukovych confirmed that a deal had been reached.

"We have reached the same conclusion that there is no other way to resolve this crisis than to organise honest and democratic elections," Yanukovych told his supporters in a speech shown on television.

"We are sure that we will win early elections, win against those who were trying to destabilise the country," said Yanukovych, who leads the powerful Regions party.

No date was announced for elections. Yushchenko indicated that a delay of at least two months is expected.

Ukraine has been in crisis since Yushchenko, hero of the pro-Western 2004 street protests known as the Orange Revolution, which swept him to power, accused his arch rival's coalition in parliament of making an unconstitutional grab for power.

Yushchenko initially decreed that the snap elections should be held on May 27 but issued a second order last week in which he changed the date to June 24, citing difficulties in organising the elections on time.

The prime minister consistently refused to obey the president's orders and brought thousands of his supporters into central Kiev for round-the-clock protests outside key government buildings.

The power struggle has led to heated debates in the country's constitutional court in which Yanukovych supporters are contesting the legality of Yushchenko's orders.