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After holding a series of high-level talks with political leaders on Thursday, President Vaclav Klaus urged a speedy resolution of the Czech government crisis. On Friday President Klaus said the natural alternative would be early elections.

The crisis in the governing coalition broke out recently over the Prime Minister's private finances and the business activities of his wife. A reconciliation attempt between the two feuding parties in government broke down on Wednesday, with both sides reiterating their earlier positions. The Prime Minister Stanislav Gross said that if the Christian Democrats could not accept him as head of cabinet, their three ministers should resign from office. The Christian Democrats say the Prime Minister himself should resign.

The Czech Republic has been marking the 57th anniversary of the communist takeover in 1948. A small crowd gathered in the Prague district of Mala Strana on Friday to commemorate a university student march to Prague Castle in which the students expressed support to then president Edvard Benes on February 25, 1948. The participants of the 1948 march were persecuted under the communist regime, which lasted in the country for forty years following the coup in February 1948.

Two Czechs have been expelled from Slovakia after being arrested in the capital Bratislava on Thursday for burning an American flag during a speech by the US President George Bush. Three Slovaks were also taken into custody for shouting obscenities at the US President. None of the arrested persons has been accused of crime and their behaviour was qualified as a misdemeanour. Mr Bush received a mainly enthusiastic welcome from Bratislava inhabitants. Over 4,000 people assembled on the town's main square to hear him speak.

The atmosphere in the governing coalition has been described as relatively calm but tense, following several hectic days during which the rift between the ruling Social Democrats and their smaller coalition partner the Christian Democrats was deepening. Informal consultations are being held and the number of options for the future political arrangement is rising. It is not yet clear whether the Social Democrat presidium will hold a meeting on Saturday and whether the party's acting chairman and Prime Minister Stanislav Gross will call a coalition meeting prior to the fundamental decision on the future of his cabinet.

The leader of the opposition Civic Democratic Party Mirek Topolanek said the Civic Democrats would only support a solution leading to early elections. The party says that whatever the outcome of the government crisis, barring early elections, the cabinet should ask for a vote of confidence in parliament. Otherwise the Civic Democrats will initiate a vote of no-confidence.

The Italian internet provider Tiscali has been allowed to join a consortium bidding for a 51.1 percent state-held stake in dominant Czech land-line operator Cesky Telecom, a ministerial privatisation commission announced on Friday. Tiscali will join the Czech-Slovak PPF/J and T/InWay consortium, one of five bidders for the state's stake. The government launched a tender for Cesky Telecom last December and said financial investors would not be allowed to bid directly but would have to team up with telecoms companies.

During consultations with the President on Thursday, Prime Minister Stanislav Gross submitted several possible solutions to the crisis. He said a solution must be found and those who could make it happen should act. The Prime Minister said that he did not see much hope for the present coalition, given the Christian Democrat's stance and that he was prepared to negotiate with all parties in Parliament. He has not, for the present, asked President Klaus to dismiss the three Christian Democrat ministers.

Meanwhile, the Christian Democrat leader Miroslav Kalousek told President Klaus that his party did not want to break up the coalition and intended to "tone down its rhetoric" in the coming days and weeks.

The Civic Democrats on Thursday added more fuel to the scandal surrounding the Prime Minister and his wife by claiming that money from a charity fund set up by the Prime Ministers wife had been channelled to a private account. During Thursday's question and answer session in Parliament Civic Democrat deputy Miroslav Benes said he had reason to believe that an unspecified sum had been transferred to the private account of Libuse Barkova, a friend and business partner of the Prime Ministers wife. Barkova herself is charged with insurance fraud. The Prime Minister responded to this accusation with anger, asking Benes to produce the evidence he had or apologize.

The Czech Republic and Haiti will re-establish diplomatic relations after more than half a century. The two countries first established diplomatic relations in the 1940s but they were broken off after the communist take-over in Czechoslovakia in 1948. Relations warmed up again after the fall of communism in 1989. The Czech Republic plans to open an honorary consulate in Haiti in the near future.

President Klaus has urged a speedy resolution of the Czech government crisis. On Thursday he held a series of high level consultations with political leaders in an effort to help break the deadlock. A reconciliation attempt between the two feuding parties in government broke down on Wednesday, with both sides reiterating their earlier positions. The Prime Minister Stanislav Gross said that if the Christian Democrats could not accept him as head of Cabinet their ministers should resign from office. Christian Democrat leader Miroslav Kalousek said the Prime Minister himself should resign in the wake of a scandal over his private finances which he said was discrediting the entire Czech Cabinet. The third party in the governing coalition, the Freedom Union has distanced itself from the feud.