April 3 (Bloomberg) -- Ukrainian lawmakers loyal to the prime minister filed a court appeal to block President Viktor Yushchenko's order to dissolve parliament and hold elections, escalating a feud between the nation's most powerful politicians.

Leaders of the 260 lawmakers belonging to Premier Viktor Yanukovych's coalition filed the request today as the 450-member assembly debated last night's dissolution. Lawmakers urged the Constitutional Court to make a decision in five days. Yanukovych countered with a threat to force presidential elections.

Yanukovych and Yushchenko, foes since the 2004 Orange Revolution, are locked in a dispute over the former Soviet republic's future, with the president urging closer ties to the European Union and the premier seeking Russian support. Yanukovych is luring lawmakers once loyal to Yushchenko to his coalition to win a vote of no confidence against his political rival.

The premier ``was very greedy for power,'' said Dr. Taras Kuzio, the president of Kuzio Associates, an independent consultancy and government communications company based in Washington and Kiev, in a telephone interview. ``It was a very difficult decision for Yushchenko but with the current government, he was never sure how long he would stay president.''

Yushchenko's Order

The Constitutional Court will announce in 15 days whether it will rule on Yushchenko's order to dismiss the parliament, the court's press service said in a statement on its Web site.

Yushchenko held a four-hour meeting with Yanukovych at his office today. ``The head of the government must understand that the president will not cancel his order and he must start preparing for early elections,'' the presidential press service said in an e-mailed statement after the meeting.

``The president is persuading the premier that elections are the only possible way of settling down the situation,'' Chalyi said. ``If Yushchenko had not dissolved the parliament, the ruling majority would have killed the opposition and ruined our democracy.''

The president also met ambassadors from the G8 countries today and assured them that the elections will be free and fair, Chalyi said.

EU Concerned

The EU is concerned about the developments and called for ``moderation and a willingness'' by all sides to make compromises.

``The European Union hopes that Ukraine's ability to act will not be undermined and that relations between the European Union and Ukraine will not be adversely affected,'' the EU said in a statement.

Chalyi said that Ukrainians have the means to ``solve the crisis without violence.''

Ukraine's 4.95 percent benchmark government bond maturing in 2015 today fell to 94.880 from 95.380 yesterday, while the yield rose to 5.721 percent from 5.64 percent yesterday. The yield on Ukraine's 7.65 U.S. dollar-denominated bond maturing in 2013 has risen 3.9 basis points since March 26 to 6 percent.

``The news is clearly negative for the market in the short term,'' said Tomas Fiala, the managing director at Kiev-based Dragon Capital, in a phone interview. ``Investors will be frightened because they like stability.''

Ukraine's early elections do not threaten its credit rating ``immediately,'' Fitch said in a report today.

`Political Uncertainty'

``The key questions are whether or not the political uncertainty will affect investor sentiment and whether or not this uncertainty will be translated into a slowdown on various structural reforms,'' said Jonathan Schiffer, a Moody's analyst in London in an e-mailed response to questions from Bloomberg. ``These are questions that will only be answered over the next few months.''

Yushchenko yesterday met for seven hours with the speaker of parliament and leaders of parliamentary groups and made the decision ``not because it's my right, but because it is required.''

The two sides of the dispute are trading accusations that rivals are breaking the Constitution. Yushchenko, a former central banker whose policies were praised by the World Bank and the International Monetary Fund, said the premier is acting illegally because he has coaxed some lawmakers loyal to the president to his coalition parties, even though legislators are barred by law from switching parties while keeping their assembly seats.

Orange Revolution

Parliamentary Speaker Oleksandr Moroz said yesterday that the president's order to dismiss parliament was unconstitutional and will refuse to stand down during today's session.

The feud began when Yanukovych's October 2004 victory over Yushchenko sparked the Orange Revolution, a two-month long series of demonstrations that drew more than a million people into the streets. A court eventually ruled the election was riddled with fraud and annulled it. Yushchenko won the presidency in the rerun poll, taking office in January 2005.

Last August, Yanukovych's Regions of Ukraine party won the most votes in general elections, giving him control of 238 seats in the 450-member parliament, rocketing him to the premiership and giving him a platform to fight Yushchenko's policies. Yushchenko's Our Ukraine went into opposition.

Yanukovych's coalition government also includes the Communist and Socialist parties.

Russian Support

Russian President Vladimir Putin, who personally endorsed Yanukovych for the presidency, opposes Yushchenko's NATO aspirations. Yanukovych, backed by Russian-speakers, said during a September visit to Brussels that Ukraine would suspend efforts to join NATO, because ``only a few Ukrainians support it.''

He also pushed laws that have curtailed the president's powers and has drawn enough legislators from opposition parties to control 260 seats. Yanukovych has been working to wrest control of 300 seats, giving him the two-thirds support to override any presidential veto and eventually oust the president.

Yushchenko canceled a planned visit to Moscow today because of the crisis, after calling off a trip last month for the same reason. Russia, which has close historical, economic and cultural ties with its Slavic neighbor of 47 million, urged all sides to show flexibility and respect the law. Russia won't intervene, Putin spokesman Dmitry Peskov said in Moscow.

``We cannot interfere. The only thing we would want to see is a politically stable and prosperous Ukraine,'' he said. The Russian foreign ministry said in a statement it's following developments ``attentively and with concern,'' urging both sides to show ``wisdom and responsibility.''

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net.

Last Updated: April 3, 2007 13:00 EDT