The supreme court on Friday annulled the presidential vote, saying it had been rigged in favour of Prime Minister Viktor Yanukovich.
The decision appeared to give Yushchenko's camp confidence that it could afford to spurn a deal, brokered by outgoing president Leonid Kuchma, to legislate curbs on the presidency's powers in exchange for reform of the misused electoral system.
A rowdy session of parliament was adjourned after the deal broke down.
"We will put pressure on the parliament and on Leonid Kuchma," Taras Stetskiv, a member of parliament from Yushchenko's party, told cheering orange-clad supporters in Kiev. "We will force them to play by our rules."
Two weeks of street protests in support of Western-oriented Yushchenko have threatened to divide the country and pitted the West against Russia, which had openly supported Yanukovich's candidacy. The re-run of the vote is set for 26 December.
"Only after he fires
the government and
puts forward a new Central Election Commission can we consider whether
to vote for political reform or not"
Member of Parliament
The court ruling was a blow to Russian President Vladimir Putin, who had campaigned for Yanukovich and opposed a simple repeat of the run-off vote.
Yanukovich confirmed he would run in the new poll, although his spokeswoman said the court ruling had been made under huge political pressure. She insisted he would win again.
Parliament last week passed a vote of no confidence in Yanukovich as prime minister and demanded that he replace the election commission. But Kuchma has not signed a decree formally firing Yanukovich.
The outgoing president - who has been in power for 10 years - appealed to international mediators, including Polish President Alexander Kwasniewski, to return to Kiev for further round-table talks with the opposition, whom he accused of reneging on their promises, Kuchma's office said.
Reform deal refused
In parliament, Yushchenko's supporters refused to twin reforms to the electoral system with a bill to cut the president's powers, saying this would be passed after the election was re-run.
But in doing so, they risked alienating some of the forces who helped them to vote Yanukovich out as premier.
Socialist leader Oleksander Moroz accused Yushchenko's party of going back on its promises.
The disputed Ukrainian election
has polarised public opinion
"This means that there may not be changes to the constitution and our monarchist form of rule will continue," he said.
A serious split with Moroz could prove damaging. Moroz also ran in the presidential race and offered his allegiance to Yushchenko for the run-off.
He is also seen as a key to garnering support for Yushchenko in the country's Russian-speaking east, Yanukovich's power base, which is suspicious of Yushchenko's desire for closer ties with western Europe.
But Stetskiv told the crowd of Yushchenko supporters massed for a 13th day on Independence Square: "We didn't vote for political reform today because we, like you, believe you cannot trust Kuchma.
"Only after he fires the government and puts forward a new central election commission can we consider whether to vote for political reform or not."
Apart from a demonstration in front of parliament, Yushchenko's supporters also formed a crowd outside government headquarters, rapping out a jungle beat on metal oil drums.
Even Yanukovich's supporters acknowledged that Yushchenko's support had increased in the past 13 days.
"Every day he has been campaigning actively and has secured more supporters than during the entire election campaign," said Vitaly Khomutynyk, a parliamentary deputy from a pro-Yanukovich faction.