By Edmund Blair
NAIROBI (Reuters) - Kenya swears in Uhuru Kenyatta as president on Tuesday after an election that avoided the bloodshed of five years ago, but left Western nations with the challenge of how to deal with a leader indicted by the International Criminal Court.
Western states regard Kenya as crucial to regional stability and have supported the role played by Kenyan and other African troops in efforts to push back al Qaeda-affiliated Islamist militants in neighboring Somalia.
The United States and European powers said they would send ambassadors to attend Kenyatta's inauguration ceremony - a level of representation diplomats said was still in line with their position of having only "essential contacts" with indictees.
It is part of a delicate balancing act that seeks to retain a policy of limiting contacts while avoiding driving east Africa's biggest economy closer towards China and other emerging Asian powers that have been gaining influence on the continent.
"They find themselves in a very difficult position," said Kenya expert Daniel Branch at Britain's Warwick University. "My sense is everyone will find some method of accommodation."
Sitting alongside the Western envoys will be about a dozen African heads of state as well as prime ministers and other top officials. China and India, neither signatories to the statutes that set up the ICC, are sending senior government officials.
But Western ambassadors at the stadium on the outskirts of Nairobi will be saved one awkward moment. A Kenyan government spokesman said the ceremony would not be attended by Sudanese President Omar al-Bashir, who is charged with genocide in The Hague and now faces an arrest warrant for not cooperating.
Kenyatta and his deputy president, William Ruto, who is also facing charges of crimes against humanity, have both promised to work with the court to clear their names of charges they deny.
Western diplomats have indicated they will take a "pragmatic" line in dealing with Kenyatta's government, but said much would depend on his cooperation with the court.
He is accused of orchestrating tribal blood-letting after the disputed vote five years ago that killed 1,200 people.
A dispute over who won the election this time was played out peacefully in court. The victory by Kenyatta, who is the son of Kenya's founding president, was upheld.
Many Kenyans hope that Kenyatta, a 51-year-old former finance minister, will now deliver a swift improvement in the economy, which has yet to return to the 7 percent growth rate attained before the December 2007 vote.
In an early sign of Western determination to keep a close partnership with Kenya, U.S. Ambassador Robert Godec met Kenyatta last week for the first time since his election and EU ambassadors put in a request for a session with him.
"We will continue to engage with the government of Kenya," said one European diplomat, noting that the ICC charges are against individuals, not the nation.
An EU official said the meeting requested with Kenyatta aimed to "clear the air" over speculation that the West would impose sanctions on Kenya if Kenyatta won. "No one is talking of sanctions," the official told Reuters.
Although some Kenyatta aides talk of a swivel east if the West spurns Kenya, the U.S.-educated Kenyatta may be just as concerned about any deterioration in ties with the EU, a big donor and significant importer of Kenyan produce, and Washington, which provides about $900 million in aid a year.
An Asian diplomat noted that Kenya could not easily switch away from Western markets, even though he said ties with Asian nations were growing.
Warwick University's Branch said Kenyatta was keenly aware of the need to keep steady relations with the West. "Kenya is part of the global economy and markets in the EU are far too important," he said.
A big portion of Kenya's horticultural exports head to Europe and many tourists, another source of hard currency, come from there. Western oil and gas firms are also major players in Kenya's emerging hydrocarbons industry.
(Editing by Mark Heinrich)