By Matt Robinson and Branislav Krstic

MITROVICA, Kosovo (Reuters) - Low turnout and complaints of coercion in a re-run election in northern Kosovo on Sunday underscored the challenge facing the European Union in implementing an accord designed to end the country's ethnic partition.

Under tight security from NATO soldiers and EU police, voting passed off peacefully in the flashpoint town of Mitrovica, two weeks after masked men hurling teargas halted the original poll.

Barely a fifth of eligible voters took part, however, even as the Serbian government mobilized public sector workers and their families to vote in organized groups under the EU-brokered accord to integrate them with the rest of majority-Albanian Kosovo.

The municipal ballot was the first to be held in Kosovo's mainly Serb north, where some 40,000-50,000 Serbs reject Kosovo as a sovereign state.

The former Serbian province declared independence in 2008, almost a decade after NATO bombed to halt a Serbian counter-insurgency war and Kosovo became a ward of the United Nations.

The north was left in an often lawless limbo, part of Kosovo but de facto under the control of Serbia in defiance of Kosovo's NATO and EU overseers.

In an historic about-face, Serbia agreed in April to recognize Kosovo's legal authority over the north in exchange for talks on joining the EU, expected to begin in January.

But there was little sign of enthusiasm among local Serbs to elect a mayor and councilors who will operate under Kosovo law.

Instead, there was evidence of the Serbian state mobilizing voters to legitimize the accord, elect a Belgrade-backed candidate for mayor and maintain influence over the area. The candidate, Krstimir Pantic, was on course to win. Just over 22 percent had voted by the time polls closed.

"I was called on Friday night and told that, as someone on welfare, they'd be giving out sugar, oil and a bit of money sent by the state so that I would vote for the government candidate," said Vesna Cosic, a pregnant unemployed Serb woman in Mitrovica.

"Then they started to threaten. 'If you don't come on Sunday, we'll take you off welfare'," Cosic told Reuters.

Several residents, clutching bags of sugar and oil, said they had received state handouts on the promise they would vote.

COLLECTIVE VOTING

Other Serbs, working in Serbian state institutions, spoke of pressure from managers to turn out with family members to vote.

Workers at the local hospital, who receive their salaries from Serbia, arrived to vote en masse, filing past an envoy of Europe's chief rights and democracy watchdog, the Organisation for Security and Cooperation in Europe, as he addressed reporters.

"There is no problem, everything is going smoothly," Ambassador Jean-Claude Schlumberger said when asked about signs of pressure on voters.

Pantic, from the Serbian Progressive Party in Serbia's coalition government, dismissed accusations of state coercion.

"There was no order from the local council for organized voting, but only a recommendation to turn out in an organized manner to prevent any possible attempt by those in favor of a boycott to again intimidate voters," he told Reuters.

A large majority of voters, however, stayed at home.

"I don't want, with my signature, to give up the right to vote again in elections organized by Serbia," said a Mitrovica shopkeeper who gave his name as Sasa.

"Given that some people have already voted, I'm afraid Serbia will never again be able to organize any elections in Kosovo," he said.

Almost 15 years since NATO wrested control of Kosovo from late Serb strongman Slobodan Milosevic, the West is still trying to rein in the north, where instability has frustrated NATO's hopes of cutting back its 6,000-strong peacekeeping force.

Serbia hopes that by resolving issues in the north, it can catch up with the likes of fellow former Yugoslav republic Croatia in joining the EU and lure investors to its struggling economy.

But the Mitrovica election has laid bare the depth of resistance among ethnic Serbs to integration with Kosovo's 90-percent Albanian majority, and the challenge facing the EU in implementing its accord.

Oliver Ivanovic, a Mitrovica mayoral candidate who appeared to be fighting a losing battle against Pantic, alleged foul play.

"This kind of pressure wasn't even seen even under Milosevic," he told Reuters, and flagged problems ahead for the accord between Belgrade and Pristina.

"Pristina can't count on raising the Kosovo flag in the north," he said. "That won't happen."

(Additional reporting by Fatos Bytyci in Pristina; Editing by Alison Williams)