DESPITE a growing risk of violence, Kenyan political reforms could keep peace in the country, say government critics and officials, Western diplomats, and foreign aid donors. But they also say new officials, new elections, and new ideas are needed quickly.On Monday, thousands of Kenyans demonstrated in various towns where organizers of a banned protest rally had been sent by the government to appear before local courts. Supporters cheered the organizers and defied police orders to disperse. The rally itself, favoring multiparty democracy to replace Kenya's one-party system, was blocked Saturday when thousands of Kenyans were turned back by police armed with clubs, guns, and tear gas. Some Kenyans were injured in the confrontations. In what appeared to be an attempt to stay ahead of escalating demands for reform, as well as keep his own job, President Daniel arap Moi on Tuesday fired one of his closest ministers, Nicholas Biwott, who is suspected of murder and high-level corruption. Mr. Biwott was named as a prime suspect Monday in a public inquiry into the murder last year of Foreign Minister Robert Ouko. Retired Scotland Yard detective John Troon, asked to investigate the case by President Moi, also alleged that Ouko was murdered to keep him from reporting to Moi about alleged corruption involving Biwott, which included soliciting enormous bribes from companies wanting to do business in Kenya. Mr. Troon also named another official, Hezekiah Oyugi, as having some knowledge or invol vement in Ouko's murder. Biwott's lawyers have denied any wrongdoing on his part. And so far no criminal charges have been brought against him. Both Kenyan and foreign observers here reacted favorably to Biwott's sacking. Biwott's firing "buys time" for Moi, says a Western diplomat, who adds that the president "is conscious of the legitimacy of his government unraveling and events moving out of control. Everyone knows there are enormous risks of violence and feel great frustration about [lack of] a proper forum [to discuss reform]." Biwott "should have been fired years back," says Loyce Nyamora of Society Magazine, which focuses on political issues. A Kenyan official says Biwott has been "one of the main people saying 'no, no' to reforms. All indications are the [president] has been seeking the best way to relieve himself of the burden [of Biwott]." Biwott's firing, the official says, opens "a window of opportunity" for peaceful political change in Kenya. Moi recently told provincial officials he wants them to prepare for elections in the near future and that they must be "very clean," according to the Kenyan official. The current parliament, elected in 1988, has been largely discredited by widespread charges of election rigging, which some government officials have privately admitted. If new elections are rigged, violent protests are likely. But even honest elections put Moi on a political hot spot. He recently endorsed multiparty elections in Kenya, but not for two to three years. If he calls for single party elections in the meantime, more antigovernment protests are likely. If he allows multiparty elections, his ow n chances for reelection are uncertain. A Western diplomat says Moi could win, but many Kenyans doubt it. In the latest edition of the Nairobi Law Monthly, Kenyan attorney Pheroze Nowrojee writes that four things are needed to bring reforms and avoid further violence: free and untainted elections, limiting the president's time in office to two five-year terms, contested presidential elections, and a nonpolitical judiciary. "We are at the most critical stage in our country's history," Mr. Nowrojee writes. "We still have the opportunity for a favorable future... Sadly, we are running out of time." Donor nations are likely to see Biwott's firing as only "part of a transition" needed to reach greater accountability, says a United States economic official. If additional steps are taken to curb corruption, and as long as Kenya is politically stable, "donors ... would immediately respond - with maybe twice as much."