By Margarita Antidze and Hasmik Mkrtchyan
YEREVAN (Reuters) - Armenian President Serzh Sarksyan's Republican Party won a parliamentary election, early results showed on Monday, in a poll that was seen as a test of democracy in Russia's main ally in the South Caucasus region.
The Republican Party took 44 percent of votes in Sunday's vote, giving Sarksyan a platform to seek a second term as leader of the former Soviet republic.
Voting ended without any of the violence that marred the 2008 presidential election - a fact that will come as a relief to Armenians hoping for a period of stability to support the battered economy.
International monitors have a mixed assessment, praising Armenia for conducting a peaceful vote but criticizing violations of campaign law and interference by political parties.
Armenia sits in a region that is emerging as an important route for oil and gas exports from the Caspian Sea to world markets, although it has no pipelines of its own.
The Republican Party is likely to seek coalition partners, possibly the Prosperous Armenia party - its main partner in the last government.
Prosperous Armenia, led by wealthy businessman Gagik Tsarukyan, finished second with 30 percent of votes on Sunday, according to the preliminary data.
"I don't see any likelihood of mass demonstrations, although the results were disappointing for many, including Prosperous Armenia," said Richard Giragosian, director of the Regional Studies Centre in Yerevan.
"There are signs that Sarksyan will consolidate his hold on the Republican Party in preparation for his presidential bid in 2013," Giragosian said.
The two leading parties put the economy and social problems at the heart of their election campaigns.
But there were no major differences in their economic programs, which called for more work to develop domestic industry and for the continuation of cooperation with Russia and international financial organizations.
Three other parties won the 5 percent of votes needed to enter parliament and the opposition Armenian National Congress, led by former President Levon Ter-Petrosyan, crossed the 7 percent threshold for party blocs to take up seats.
HOPES OF STABILITY
Many voters had hoped the election would be a landmark for democracy after the voting irregularities that marred the 2007 parliamentary election and clashes killed 10 people after the presidential vote in 2008.
"Armenia deserves recognition for its electoral reforms and its open and peaceful campaign environment," the international observers from the Parliamentary Assembly of the Organization for Security and Cooperation in Europe said in a statement.
But it added that several unnamed "stakeholders" had too often failed to comply with the law, and the election commissions had "too often failed to enforce it".
Police received 129 complaints of ballot stuffing, attempts to bribe voters and other irregularities although the force said some proved to be false.
Armenia's economy was devastated by a war with neighboring Azerbaijan in the 1990s and then again by the 2008-2009 global financial crisis.
Although a ceasefire was reached in 1994, the conflict with Azerbaijan over the tiny Nagorno-Karabakh region remains unresolved and a threat to stability.
Relations with another neighbor, Turkey, are also fraught because Ankara does not recognize as genocide the killing of Armenians in Ottoman Turkey during World War One.
(Editing by Timothy Heritage; Editing by Andrew Heavens)