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The protest was timed to coincide with the convening of the new parliament, elected in a Nov. 2 ballot that the opposition claims was rigged and which has fueled popular anger against Shevardnadze's government.
Shevardnadze, speaking to journalists inside the parliament building, said he was ready for dialogue with the opposition, but "without any ultimatums. Parliament was elected and ... parliament should begin work today."
This poverty-stricken country has slid into its biggest political crisis in years, with pro- and anti-Shevardnadze forces vowing to avoid bloodshed but also refusing to budge. Both sides are amassing thousands of supporters in the already tense capital.
"We are giving the president one last chance," protest leader Mikhail Saakashvili said, addressing thousands of his supporters on Freedom Square. "Within one hour, either he comes to the people or the people will come to him."
The crowd, which was swelling by the minute, chanted "leave" and "enough." People carried placards reading, "Georgia without Shevardnadze" and "Shevardnadze, your century was the 20th. Now it is the 21st."
As tension escalated, Shevardnadze appeared to soften his position. He acknowledged that there had been some problems with the election, which the pro-Shevardnadze party won according to the official results. "About 8 to 10 percent of the ballots were invalid," he said, but added that this should be dealt with in the courts.
The opposition National Movement and Democrats have refused to take up their 57 seats in the parliament and vowed to block parliament from convening.
"The president must confess his guilt in the parliamentary elections," said opposition leader Nino Burdzhanadze. "He still may announce that new, fair elections will be held for parliament. We are not turning back."
The leftist Labor Party, which came fourth in the official results, also announced Saturday that it would not send its 25 lawmakers to the session. The Labor Party has not participated in the demonstrations, but has condemned the voting results and filed a challenge to the High Court.
Pro-Shevardnadze forces and their Revival party allies are still expected to rustle together a quorum to make the parliamentary session legally valid, but a showdown with opposition looked increasingly likely as criticism grew of the election.
State Department spokesman Adam Ereli said the poll results reflect "massive vote fraud" in some regions and "do not accurately reflect the will of the Georgian people." On Friday, the State Department called on Georgia's government to conduct an independent investigation into the results.
Georgia's top security official also acknowledged Friday that the vote - which independent exit pollers said the opposition appeared to have won - had been tarnished by fraud.
In a sign of significant rift, Security Council Secretary Tedo Dzhaparidze, a former ambassador to the United States, said the new parliament should only be considered temporary, sitting until a new vote can be held.
According to final results, the pro-Shevardnadze For a New Georgia bloc came in first with 21.32 percent of the vote, while the Revival party, which sometimes has been critical of the government but sided with Shevardnadze in the present crisis, finished second with 18.84 percent.
Saakashvili's National Movement came in a very close third with 18.08 percent of the vote, while the Democrats who allied with Saakashvili got 8.8 percent. The Labor party had 12 percent.
Russia, which remains a key power in the region, also acknowledged that the election war marred and called for the "mistakes to be corrected, but in the realm of the law."
"The alternative is chaos," the Russian Foreign Ministry warned.
Shevardnadze criticized the opposition on Saturday for calling for civil disobedience, saying "Is this your country or not? If you have a program, talk as much as you want. Gather 20,000 or 100,000. I also will come to listen, if it is an interesting program."
Calls for Shevardnadze's resignation reflect growing popular resentment at the widespread unemployment, poverty and chaos here 12 years after the Soviet Union collapsed.
AP-ES-11-22-03 0657EST
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