But the mediation effort appeared to stumble as opposition leader Raila Odinga’s party lashed out at President Mwai Kibaki, accusing him of undermining the symbolic gesture.
The rivals earlier stood together and spoke to reporters with Mr Annan after weeks of violence sparked by the contested election, in which close to 800 people died.
Mr Annan described the meeting as “a very encouraging development”.
“I think we began to take the first steps towards a peaceful solution of the problem,” he said.
Mr Kibaki has insisted on direct talks with Mr Odinga, who had refused to meet without a mediator.
But Mr Kibaki’s statement that he had been “sworn in as your duly elected president of Kenya,” drew the wrath of the opposition of Mr Odinga, who claims he was robbed of victory in the polls.
At a press conference shortly afterwards, Orange Democratic Movement secretary general Anyang Nyongo accused Mr Kibaki of seeking to use the meeting to legitimise his contested presidency.
“We categorically reject the unfortunate statement by Mr Kibaki that he is the duly-elected president of Kenya,” Mr Nyongo said.
“True to his fraudulent character, Mr Kibaki abused the occasion by attempting to legitimise his usurpation of the presidency.”
On Mr Kibaki’s side, government spokesman Alfred Mutua said: “It’s unfortunate the ODM comes up with this statement after the whole world watched President Kibaki and Mr Odinga launch efforts for dialogue and reconciliation.”
“We have taken the first vital steps in resolving electoral disputes,” Mr Odinga told reporters. “I ask everyone to be patient and uphold peace in a spirit of brotherhood.”
Mr Kibaki said: “I will personally lead our country in promoting unity, tolerance, peace and harmony.”
Mr Annan warned the low-level violence had to stop, after 12 deaths were reported overnight in the latest clashes. On Wednesday he convinced Mr Odinga to call off new protest rallies scheduled for the next day.