GENEVA (Reuters) - International powers agreed on Saturday that a national unity government should be set up in Syria to resolve the conflict between President Bashar al-Assad and opposition forces trying to oust him.

Peace envoy Kofi Annan said after the talks in Geneva that the government should include members of Assad's administration and the opposition. But it was not immediately clear what role, if any, was envisaged for Assad.

"It is for the people to come to a political agreement but time is running out," Annan said. "We need rapid steps to reach agreement. The conflict must be resolved through peaceful dialogue and negotiations."

The parties must put forward interlocutors to help him work towards a settlement, he added.

The Geneva talks were billed as a last-ditch effort to halt the worsening bloodshed in Syria but hit obstacles as Russia, Assad's most powerful ally, opposed Western and Arab insistence that the Syrian strongman must quit the scene.

(Reporting by Tom Miles, Editing by Angus MacSwan; Editing by Roer Atwood)