By Natalya Zinets and Richard Balmforth
KIEV (Reuters) - Viktor Yanukovich was sworn in as president on Thursday saying Ukraine was facing "colossal debts," poverty, corruption and economic collapse.
Yanukovich, who is expected to tilt his former Soviet state back towards Moscow, defeated Prime Minister Yulia Tymoshenko in a February 7 run-off which she tried to contest as fraudulent.
In his inauguration speech Yanukovich declared he would pursue a foreign policy involving ties with Russia, the European Union and the United States that would reap "maximum results" for the country.
"Ukraine needs a strategy of innovative movement forward and such a strategy has been worked out by our team," he said.
Yanukovich took the oath of office in a low-key ceremony reflecting a bitterly-fought and disputed election which has highlighted deep divisions in the country.
His inauguration marked a comeback from humiliation five years ago when mass protests, called the Orange Revolution, overturned an election that had been rigged in his favour.
But Thursday's ceremony in Ukraine's parliament had a hollow ring to it. Most of the parliamentary faction of Tymoshenko and the prime minister herself stayed away and many of the seats in the parliament building were unfilled.
Yanukovich beat Tymoshenko by 3.5 percentage points and won the support of only a third of the 37 million-strong electorate, making him the first president of Ukraine to have been supported by less than 50 percent of those who voted.
The voting pattern highlighted a sharp split between Russian-speaking voters in the industrial east and south who backed Yanukovich, and Ukrainian-speakers in the west and centre who voted for Tymoshenko.
Tymoshenko only last Saturday dropped her legal challenge to Yanukovich's election.
Now she is resisting attempts to oust her as prime minister, signalling continued political tension in the ex-Soviet state of 46 million, at least in the short-term.
TILT TO MOSCOW
Yanukovich, a burly former mechanic who had a deprived childhood in eastern Ukraine and as a young man was convicted twice for petty crime including assault, is expected to tip the country back towards Moscow after estrangement under the pro-Western President Viktor Yushchenko.
He has hinted at possible concessions to Moscow over the future of Russia's Black Sea fleet forces in Ukraine's Crimean peninsula and has proposed the creation of a consortium including Russia to run the country's gas pipelines.
But he says he wants to change a 10-year-old agreement on supplies of Russian gas to Ukraine which was negotiated by Tymoshenko and Russian Prime Minister Vladimir Putin.
He will put Yushchenko's drive for NATO membership onto the back-burner. But he says he will pursue a balanced foreign policy and has vowed to push for closer ties with the EU.
Though there is little appetite in the European Union to take on Ukraine as a member, EU sources said Yanukovich will travel to Brussels on Monday on his first visit abroad.
Yanukovich's Regions Party and the Kremlin have said he will visit Moscow in early March.
Ukraine's economy was hit hard by the global downturn and is dependent on a $16.4 billion International Monetary Fund bail-out programme. IMF lending was suspended late last year and is only likely to resume when stability returns.
Yanukovich's immediate task will be to deliver on a promise to make life better for Ukrainians and for that he needs a prime minister with whom he can work.
He has already mooted three candidates to replace Tymoshenko -- businessman and former central bank chief Sergey Tigipko, former foreign minister and parliament speaker Arseniy Yatsenyuk and former finance minister Mykola Azarov.
She is seeking to persuade her parliamentary allies to close ranks round her, while his party and its powerful backers, many of them wealthy industrialists, are seeking to draw deputies away from her coalition and forge a new one.
Forging a coalition requires some tricky horse-trading and could be a lengthy process. If Yanukovich fails to secure a new coalition, he will reluctantly have to call new parliamentary elections, further prolonging uncertainty.
(Editing by Jon Boyle)
