Kyrgyzstan began voting on Sunday to elect a new president capable of bridging divisions that threaten stability in the former Soviet republic, a vital step to completing bold reforms to create Central Asia's first parliamentary democracy.

A clean election would signal the first peaceful handover of the presidency in the mainly Muslim and strategically important 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.

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.

Opinion polls have made Atambayev the clear favourite, 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.

We want to live better, and he's a grafter, said retired construction worker Nikolai Dubovik, 77, the first to vote at a school in the capital Bishkek, a city coated in the first snow of winter.

The current authorities have done a lot, but not everything they promised, said 53-year-old architect Kubanbaike, who declined to give his second name.

The price of gasoline is hitting us in the pocket. Sugar has nearly doubled in price in the last year, he said.

NORTH-SOUTH DIVIDE

The election also threatens to expose a north-south cultural divide. Atambayev, from the more Russian-leaning 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 said millions of Kyrgyz citizens would take to the streets to overthrow the country's leaders if they believed the elections to be unfair.

We want an honest president who can uphold the law, somebody who will not allow the country to be divided by clans or by north and south, said 43-year-old Bishkek schoolteacher Aida, also declining to give her second name.

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

The field of 16 candidates and the unpredictability of the result make Kyrgyzstan stand apart in formerly Soviet Central Asia, a region otherwise governed by authoritarian presidents.

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

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.

The wishes of some Kyrgyz voters were simple.

I'm a pensioner already. May God help our children not to kill and steal from each other, said Jamillya Karashova, 62. We want peace on our soil. And maybe just a little happiness.

(Reporting by Robin Paxton; Editing by Ralph Gowling)