Mr Chen called on the protesters to disperse
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Taiwanese President Chen Shui-bian has attempted to defuse the political crisis over his narrow re-election by offering to have talks with his rival.
Speaking just hours after a mass protest by opposition supporters, Mr Chen invited the Kuomintang party's Lien Chan to meet him on Monday.
He said the meeting could take place without conditions.
Demonstrators have accused Mr Chen of rigging the election, in which he beat Mr Lien by less than 30,000 votes.
They also allege that an apparent attempt to kill Mr Chen on the eve of polling was in fact staged by the president himself - a charge that he described as a great insult to his personal integrity.
Recount pressure
Mr Chen made the offer to meet his defeated rival in his first news conference since the election a week ago.
He was speaking shortly after Mr Lien told a rally of 300,000 supporters outside the presidential palace that opposition protests in support of a recount would continue "until our goal is achieved".
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I was in the protest simply because I demand a recount. I don't trust Chen and the outcome of the election
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President Chen said he would order an immediate recount of the vote if the opposition filed a legal challenge to the election result.
But he told opposition supporters who have been occupying the square outside the presidential palace for the past week to go home, saying the government's tolerance "must not be taken for granted".
On Friday, opposition activists clashed with police and stormed the offices of Taiwan's election body after Mr Chen's narrow victory was officially confirmed.
Despite Mr Chen's willingness to endorse a speedy recount, lawmakers have so far failed to agree on how to make the necessary changes to election laws.
'People power'
Mr Lien addressed Saturday's rally dressed in black as a sign of mourning and standing in front of a huge sign reading "Democracy is Dead".
He said there had been more than 1,000 irregularities in the vote.
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POLL RESULTS
Chen Shui-bian: 6,471,970 (50.11%)
Lien Chan: 6,442,452 (49.89%)
337,297 invalid ballots
Turnout: 80.28%
Source: Central Election Commission
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"Our common demands are very simple: immediate recount. I want to ask Mr Chen Shui-bian: What are you afraid of? Stand up!"
Appealing to his supporters to remain calm, Mr Lien said the opposition struggle had to be "flexible", interacting with President Chen on a long-term basis.
"We must be prepared for a long battle," Mr Lien said. "We will not end our struggle until our goal is achieved. We must let the world see the power of the people."
Chaos fears
Police investigating the attempted assassination of the president have released the first images of an unidentified man walking away from the scene where he was shot.
The grainy images from a closed-circuit TV camera showed a balding, middle-aged man in a yellow jacket and blue trousers walking briskly away from the scene.
The attempted assassination is "suspicious", the opposition alleges
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Police said there was no other evidence to link him to the attack, but they wanted to identify him.
The opposition say the suspicious circumstances surrounding the shooting - and alleged irregularities - one day before the vote cost them the election.
President Chen has said the assassination attempt was genuine and rejected allegations of vote-rigging.
China, which regards Taiwan as part of its own territory, says it will not stand by if Taiwan descends into chaos.
Taiwan has told China not to interfere.
A spokesman for US President George W Bush, Scott McClellan, urged Beijing and Taipei to pursue dialogue and refrain from unilateral steps that would alter Taiwan's status.
He said the US would continue to maintain close ties with Taipei.
Later, Beijing denounced as a "mistake" a US message congratulating Mr Chen after his narrow re-election was formally confirmed on Friday.