By Robin Paxton

BISHKEK (Reuters) - Kyrgyzstan aims to complete bold reforms to create Central Asia's first parliamentary democracy when it votes on Sunday to elect a new president capable of bridging the divisions that threaten stability in the strategic ex-Soviet state.

A clean election would signal the first peaceful handover of the presidency in the mainly Muslim country after 20 years of failed authoritarian rule, the culmination of reforms set in motion after a bloody revolt toppled the president last year.

But two challengers to the front-runner, the Moscow-backed Prime Minister Almazbek Atambayev, have said they will contest the results if they believe violations have taken place, raising the spectre of protests by disgruntled supporters.

Instability in Kyrgyzstan concerns the United States and Russia, which operate military air bases in the country of 5.5 million people and share concerns over drug trafficking and the future spillover of Islamist militancy from nearby Afghanistan.

Those who took power after an April 2010 revolution, led by outgoing President Roza Otunbayeva, have watered down the powers of the president and established parliament as the main decision-making body in Kyrgyzstan.

"There is hope that the country has embarked upon a stable path to development," Otunbayeva said in a televised address to the nation as campaigning closed on Friday evening.

Atambayev, the 55-year-old pro-business prime minister, is the flag-bearer of these reforms. His policies are closest to those of Otunbayeva, a former ambassador to London and Washington who will step down at the end of 2011.

Local opinion polls place Atambayev as the clear favorite, although some analysts doubt he can secure the required 50 percent of votes to win outright. Should he fall short, he will face a run-off against a strong challenger from the south.

NORTH-SOUTH DIVIDE

The election also threatens to expose a north-south cultural divide. Atambayev, from the more Russified and industrial north, faces a strong challenge from two candidates who can draw on the nationalism of voters in the poorer south.

One of these candidates, three-times national billiards champion Adakhan Madumarov, wants to reverse the constitutional reforms to give equal prominence to the presidency and parliament.

The other leading southern candidate, trained boxer Kamchibek Tashiyev, has warned that "millions" of Kyrgyz citizens would take to the streets to overthrow the country's leaders if they believe the elections to be unfair.

Otunbayeva, in her address, said she would view any attempts to provoke people into destabilising the security situation in the country as an "act against our state."

"The state and the law enforcement authorities can provide the conditions for voting within the law," she said.

The next president will be permitted by the current constitution to serve a single 6-year term and will appoint the defense minister and national security head.

Posters featuring all three leading candidates, plus many more of the other 13 hopefuls on the ballot paper, hang along every main boulevard in the capital Bishkek, where the first snow of Winter fell on the eve of the election.

The large field of candidates and the unpredictability of the result make Kyrgyzstan stand apart in ex-Soviet Central Asia, a region otherwise governed by authoritarian presidents.

"In the context of the region, Kyrgyzstan is different," Walburga Habsburg Douglas, the Swedish member of parliament who is leading the Organization for Security and Cooperation in Europe's observation mission, told Reuters.

"The people have a genuine choice of candidates, who are presenting different programmes," she said. "Here, you have a pluralism that is reflected in the election campaign."

(Reporting by Robin Paxton)




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