International powers have agreed that a transitional government should be set up in Syria to end the bloodshed there but left open the question of what part President Bashar al-Assad might play in the process.

Peace envoy Kofi Annan said after talks in Geneva on Saturday that the government should include members of Assad's administration and the Syrian opposition and pave the way for free elections.

"It is for the people to come to a political agreement, but time is running out," Annan said in concluding remarks. "We need rapid steps to reach agreement. The conflict must be resolved through peaceful dialogue and negotiations."

The Geneva talks had been billed as a last-ditch effort to halt the worsening violence but hit obstacles as Russia, Assad's most powerful ally, opposed Western and Arab insistence that he must quit the scene.

The final communique said the transitional government "could include members of the present government and the opposition and other groups and shall be formed on the basis of mutual consent".

But in a victory for Russian diplomacy, it omitted language contained in a previous draft which explicitly said it "would
exclude from government those whose continued presence and participation would undermine the credibility of the transition and jeopardise stability and reconciliation".

Al Jazeera's Peter Sharp, reporting from Geneva, said that the removed text "was presumed by Russia to suggest that President Bashar al-Assad would not be able to take part in the new government. And they put their foot down".