We realize the $U_q(\widehat{sl(2)})$ current algebra at arbitrary level in terms of one deformed free bosonic field and a pair of deformed parafermionic fields. It is shown that the operator product expansions of these parafermionic fields involve an infinite number of simple poles and simple zeros, which then condensate to form a branch cut in the classical limit $q\rightarrow 1$. Our realization coincides with those of Frenkel-Jing and Bernard when the level $k$ takes the values 1 and 2 respectively.