Security was tight for the hearing
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Taiwan's High Court has given lawyers for President Chen Shui-bian and the opposition five days to agree how to recount last month's contested poll.
The two sides failed on Friday to agree who should pay for the recount.
"Both sides should negotiate the terms of the recount and re-submit their cases in five days," said Wu Ching-yuan, of the three-member tribunal.
President Chen narrowly won the vote, but the opposition says the result was marred by voting irregularities.
The opposition also wants an inquiry into an election-eve shooting in which Mr Chen and his running mate Annette Lu were both slightly wounded.
During the two-hour hearing, Mr Chen's lawyers said that the law required
plaintiffs to pay for such civil lawsuits, and that the opposition should foot the bill for the recount, which could cost more than $1m.
"We have won the election. Why should we pay for a
recount?" lawyer Joseph Lin said.
Earlier, secretary-general Lin Feng-cheng of the opposition Kuomintang (KMT) party, warned the political stand-off may not be resolved quickly.
"If our appeal fails to get a positive response, President Chen and his ruling party must take full responsibility for any consequences."
'Insincere'
The opposition has complained that the shooting of Mr Chen swung him an unfair sympathy vote. They have also questioned the high number of invalidated ballots cast, although independent observers have called the election free and fair.
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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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"The president has been insincere," Mr Lin added.
"He would not want suspicions to linger throughout his four-year term that he was elected by two bullets."
The court is now scheduled to reconvene early next week.
It remains unclear how long the three judges hearing the case will take to reach a decision, or when any possible vote recount would begin.
Mr Chen has agreed to a recount, which means that in theory the court could rule quite quickly.
The court hearing stems from a KMT-led suit filed on Monday which called for the election result to be declared void.