By Richard Lough and Alain Iloniaina
ANTANANARIVO (Reuters) - Madagascar's first presidential election since a military-backed coup was free and fair, European Union (EU) and Southern African observers said on Sunday, as early results trickled out two days after the poll.
The announcements were a boost for the Indian Ocean island which needs a credible vote to rebuild investors' confidence and win back aid suspended after dissident troops propelled Andry Rajoelina into power in 2009.
But foreign envoys warned there was still time for an upset. Full results cold take as long as a week to emerge and the two front-runners both anticipate a second-round runoff, prolonging the uncertainty.
"This election has been free, transparent and credible," the head of the EU observer mission, Maria Muniz de Urquiza, said.
The Southern African Development Community (SADC), which suspended Madagascar as a member after Rajoelina's power grab, said the vote had "reflected the will of Malagasy people".
By midday, the electoral commission (CENIT) had released results from just 1,019 of the 20,001 voting stations dotted across the world's fourth largest island that is famed for its lemurs and eyed by foreign firms for its oil, nickel, cobalt.
DIPLOMATS WATCH ARMY
Two of the most fancied candidates maintained their early leads. Jean Louis Robinson - backed by the president deposed in 2009, Marc Ravalomanana - is holding steady with about 27 percent of the vote.
His nearest rival, Hery Rajaonarimampianina, a former finance minister under Rajoelina, is polling consistently at just under 16 percent.
Friday's vote was peaceful, but the EU observer mission said the lack of a cap on campaign spending had led to "flagrant inequalities" between candidates. It also noted that a "not negligible percentage" of voters were left off the voter list.
These shortcomings had not prevented the vote running smoothly, said de Urquiza.
Diplomats said they were watching the military, parts of which they say remain opposed to Ravalomanana's return from exile - a scenario widely expected if Robinson wins the vote.
"We've made a big step forward but all the options are open," said one European diplomat, who asked not to be named.
Many Malagasy voters said they were frustrated by the delays and flaws in the process.
"I don't know whether it was deliberate or incompetent," said 25-year-old Henintsoa Ramanana who was barred from voting when electoral officials said he was not registered. "In any case, it's truly shocking to be deprived of the right to vote."
(Editing by George Obulutsa and Andrew Heavens)