NAIROBI - Kenyan police put up roadblocks on streets leading to the presidential palace on Thursday as some protesters vowed to "occupy State House", despite the president's climbdown on proposed tax hikes that sparked a week of demonstrations.

It was not clear how far protesters would be mollified by President William Ruto's Wednesday decision to withdraw the finance bill, a day after clashes killed at least 23 people and parliament was briefly stormed and set alight.

Ruto defended his push to raise taxes on items such as bread, cooking oil and diapers, saying it was justified by the need to cut Kenya's high debt, which has made borrowing difficult and squeezed the currency

Lacking a formal leadership structure, however, protest supporters were divided on how far to carry the demonstrations.

In the capital, Nairobi, police and soldiers patrolled the streets on Thursday and blocked access to the State House.

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Police fired teargas to disperse several dozen people who had gathered in the center of the city, although the crowds were nowhere near the size of those in Tuesday's mass protests.

Reuters reporters saw army vehicles on the streets after the government deployed the military to help police.

Hundreds of protesters gathered in the port city of Mombasa and in the western city of Kisumu, local television footage showed, although those gatherings appeared peaceful.

Dialogue, austerity

In a speech on Wednesday, Ruto defended his push to raise taxes on items such as bread, cooking oil and diapers, saying it was justified by the need to cut Kenya's high debt, which has made borrowing difficult and squeezed the currency.

But he acknowledged that the public had overwhelmingly rejected the finance bill. He said he would now start a dialogue with Kenyan youth and work on austerity measures, beginning with cuts to the budget of the presidency.

The International Monetary Fund, which has been urging the government to cut its deficit to obtain more funding, said it was closely monitoring the situation in Kenya.

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"We are deeply concerned about the tragic events in Kenya in recent days," the IMF said in a statement. "Our main goal in supporting Kenya is to help it overcome the difficult economic challenges it faces and improve its economic prospects and the well-being of its people."

Ratings agency Moody's said the shift in focus to cutting spending rather than boosting revenue will complicate the disbursement of future IMF funding and slow the pace of fiscal consolidation.

Analysts at JPMorgan said they had maintained their forecasts for a deficit of 4.5 percent of GDP in FY2024/2025, but acknowledged the government and IMF targets could be revised in light of recent developments.

They said the Central Bank of Kenya was unlikely to begin cutting rates until the final quarter of this year.