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By Prak Chan Thul

PHNOM PENH (Reuters) - Cambodia's government rejected on Tuesday calls by the opposition for an international inquiry into allegations it used massive fraud to win re-election, and said it wanted parliament to approve a new cabinet quickly.

The United States and European Union expressed concern about irregularities in Sunday's election but both said an investigation should be conducted by Cambodian electoral authorities, failing to endorse the opposition's call for an inquiry involving the United Nations.

The government announced on Sunday that the Cambodian People's Party (CPP) of long-serving Prime Minister Hun Sen had won 68 seats in the 123-seat parliament, a sharp fall from its previous tally of 90. The opposition Cambodia National Rescue Party (CNRP) nearly doubled its seat total to 55, in a major surprise and a setback for Hun Sen.

CNRP leader Sam Rainsy said up to 1.3 million names had been missing from the electoral rolls and complained about lack of access to the media as well as intimidation on the campaign trail.

Ouch Borith, secretary of state at the Foreign Affairs Ministry, rejected such allegations at a news conference.

"We have over 10,000 national observers and over 100 international observers who reckoned our election was held in a peaceful manner without any violence, free and fair," he said.

There was no proof of any missing names, he added. "The opposition party should be asked to show clearly what evidence it has about the irregularities it alleges. The National Election Committee has already said 'please bring up evidence, don't just say it, so we can work together to solve things'."

Sean McIntosh, spokesman for the U.S. embassy in Phnom Penh, told Reuters in an email: "We're calling on the National Election Committee (NEC) to conduct a full and transparent investigation into all credible reports of irregularities."

The European Union also expressed concern about "shortcomings".

"The EU hopes that any dispute addressed to the National Election Committee and the established judicial mechanisms will be dealt with fairly and swiftly," it said in a statement.

The NEC has not yet given the number of seats won by each party.

CONCERN OVER INEQUALITY, CORRUPTION

Hun Sen, 60 and prime minister for 28 years, has made no comment on the results and has not appeared in public since Sunday. His party issued a statement on Tuesday denying rumors he had resigned and left the country.

Even by the government's own figures, Sunday saw his worst election result since the country returned to full democracy in 1998, after decades of war and turmoil including the 1975-79 "Killing Fields" rule of the Khmer Rouge.

Prolonged wrangling over the result and a weakened Hun Sen could raise uncertainty over policy in the small but fast-growing Southeast Asian country that has built up a thriving garment sector and forged economic ties with China and Vietnam.

A quorum of 120 out of 123 lawmakers is needed in parliament to approve a new cabinet, so the CNRP could delay this.

But its chances of overturning the election results seem slim given the ruling party's grip on the courts and with major foreign donors like the United States unlikely to reject the outcome without evidence of massive fraud.

The opposition tapped into growing concern among Cambodians over inequality and corruption.

Rising garment exports plus heavy flows of aid and investment from China have fuelled economic growth, but that has been accompanied by a rise in social tension.

There are regular, often violent, protests over pay and conditions by garment workers and over land rights in a country of 14 million, where a third of the people live on less than 65 U.S. cents per day.

Rights groups say the electoral system is heavily biased in favor of the ruling party and Transparency International Cambodia, which monitored the election, said it was "very concerned about the disenfranchisement of citizens and suspect voters".

Voting on Sunday, like the campaign itself, was for the most part peaceful.

(Writing by Alan Raybould; Editing by Stuart Grudgings and Robert Birsel)

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