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By Tsegaye Tadesse

ADDIS ABABA, Jan 30 (Reuters) - There is clear evidence of "ethnic cleansing" in Kenya's Rift Valley since a disputed Dec. 27 election, but it does not amount to genocide, the top U.S. diplomat for Africa said on Wednesday.

"There has been an organised effort to push out people from Rift Valley...It is clearly ethnic cleansing. I don't consider it genocide," U.S. Assistant Secretary for African Affairs Jendayi Frazer told reporters.

"The cycle of retaliation has gone too far and has become more dangerous."

Kenya's sudden slide into chaos -- with more than 850 people killed mostly in ethnic violence -- has horrified world powers, damaged the region's most promising economy and shattered its image as a stable trade and tourism hub.

Frazer said the United States wanted an investigation into the violence, including the killing of civilians by police, and said guilty parties must be held accountable.

She called on Kenyan leaders to avoid inflammatory rhetoric.

The United States backs mediation being led by former U.N. chief Kofi Annan, between President Mwai Kibaki and opposition challenger Raila Odinga, she said. Formal mediation started on Tuesday.

"We are advocating some kind of power-sharing and some kind of coalition government," she said, adding that there also needed to be constitutional and land reform to address deep-seated grievances between Kenya's ethnic groups.

Post-election protests have descended into cycles of killing between tribes who have never reconciled divisions over land, wealth and power dating back to British colonial rule.

Annan said he was confident that the "immediate political issues" could be resolved within four weeks and the broader issues underlying the crisis within a year.

Frazer said she planned to consult African leaders meeting in Addis Ababa this week on the way forward, and warned that Kenya may find a solution imposed if it doesn't solve its own problems.

"We'll find an international mechanism if they can't find it internally," she said.

Western donors have urged both sides to take Annan's efforts seriously or risk losing development aid.

The United States, which considers Kenya a major regional ally, has no plans to cut aid, she said.

"The vast majority of U.S. aid is for HIV and malaria eradication," distributed by non-governmental organisations, she said. "It would be counterproductive to stop this aid." (Writing by Bryson Hull and Daniel Wallis, Editing by Andrew Cawthorne)

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