Fireworks explode over the Independence Square after opposition leader Yulia Tymoshenko's speech during a rally in Kiev. Photo: Vasily Fedosenko

Kiev - A new era opened in Ukraine on Sunday after a day of dramatic twists and turns that saw parliament vote to oust a defiant president and call early elections, and opposition icon Yulia Tymoshenko walk free.

The whereabouts of Viktor Yanukovych remained a mystery, after authorities claimed they had prevented the embattled leader from escaping the country and said he may be hiding out in the east, which is broadly pro-Russian and where concerns remain over the potential for unrest.

And while life creaked back to normal in central Kiev for anti-Yanukovych protesters occupying the capital's Independence Square - where curious onlookers paid their respects to those who died under police fire this week - the focus abroad shifted to rebuilding a battered country on the verge of default.

At a G20 gathering in Sydney, the United States and International Monetary Fund offered to assist Ukraine in rebuilding its economy following a three-month protest movement that dramatically escalated this week with the deaths of nearly 100 people in clashes between demonstrators and security forces.

US Treasury Secretary Jacob Lew emphasised that the United States, working with other countries including Russia, “stands ready to assist Ukraine as it implements reforms to restore economic stability and seeks to return to a path of democracy and growth”.

Fears that Ukraine's debt-laden economy is facing default have sparked panic on markets, with bond yields rising sharply and the hryvnia currency losing a tenth of its value in the span of a few weeks.

A new interim government could be announced Sunday in Ukraine, where residents were still reeling from the dizzying changes unleashed over the past week as a mainly peaceful protest movement turned deadly.

The spiralling crisis prompted Yanukovych to sign a Western-brokered peace deal Friday with the opposition, which then took over parliament and ushered in huge political changes - including a vote to free Tymoshenko, the fiery 53-year-old hero of the 2004 pro-democracy Orange Revolution.

Yanukovych's arch-nemesis, Tymoshenko was sentenced to seven years in jail for “abuse of power” after his election in 2010.

Shortly after the parliament vote Saturday, she was freed from hospital in the eastern city of Kharkiv where she had been treated under guard, and headed straight to Kiev and Independence Square where she was greeted by an emotional, 50,000-strong crowd.

Hailing the end of a “dictatorship”, she said in a tearful voice late in the evening: “You are heroes, you are the best of Ukraine.

“I did not recognise Kiev, the burnt cars, the barricades, the flowers, but it's another Ukraine, the Ukraine of free men,” she said, sitting in a wheelchair suffering from chronic back problems, her face drawn after two-and-a-half years in jail.

Her appearance on the square would have been unthinkable just a few days ago, much like the fate of Yanukovych himself.

On Saturday, police, parliamentary allies and members of his Regions Party deserted the president one by one.

The army issued a statement saying it “will in no way become involved in the political conflict” and the police force declared itself in support of “the people” and “rapid change”.

Security forces all but abandoned government and presidential buildings and anyone was free to enter unchallenged.

Even Yanukovych's ostentatious mansion near the capital became a free-for-all, city residents gawping in awe and anger at the luxury of a sprawling estate that featured a private zoo and a replica galleon floating on an artificial waterway.

But still he remained defiant, appearing on television from Kharkiv before reportedly leaving the city, denouncing a “coup” and vowing not to step down.

“I am not leaving the country for anywhere. I do not intend to resign. I am the legitimately elected president,” the 63-year-old leader said.

Nevertheless, Saturday's developments appeared to swing the balance of power in Ukraine in the opposition's favour and seemingly superseded the pact Yanukovych had signed just a day earlier to end the country's bloodiest conflict since its independence in 1991.

“This is a political knockout for Yanukovych,” charismatic former boxer-turned-opposition leader Vitali Klitschko said in a statement.

“Yanukovych is no longer president.”

Western countries cautiously welcomed the rapid-fire changes taking place in Ukraine - which has been in crisis since November, when Yanukovych ditched a key European Union trade pact in favour of closer ties with Russia.

The EU, whose envoys from France, Poland and Germany negotiated the peace deal with Yanukovych, said a “lasting solution to the political crisis” needed to be found.

“This must include constitutional reform, the formation of a new inclusive government, and the creation of the conditions for democratic elections,” said EU foreign policy chief Catherine Ashton.

Ukraine is broadly divided between the Russian-speaking east and a nationalist Ukrainian speaking west.

The protracted protests have morphed into a wider geopolitical confrontation between Russia, which wants to keep reins on its historic fiefdom, and the European Union and United States, which want to bring the nation of 46 million people into the West's fold.

Polish Prime Minister Donald Tusk, who has played an active role in efforts to end the crisis, said Saturday that there were forces threatening the territorial integrity of Ukraine, without specifying what they were. - AFP