Thousands protest over Armenia's election result

YEREVAN (Reuters) - Thousands of protesters gathered in Armenia's capital on Wednesday claiming a presidential election was rigged to hand victory to Prime Minister Serzh Sarksyan, but Western observers called it broadly fair.

Sarksyan has promised to continue the policies of outgoing President Robert Kocharyan, his close ally. The new leader's biggest challenges will be a simmering territorial conflict with neighboring Azerbaijan and frozen ties with Turkey.

Sarksyan took 52.86 percent of the votes, the Central Election Committee said, giving him enough to win outright in the first round.

Nearest rival Levon Ter-Petrosyan, Armenia's first president after independence from the Soviet Union, had 21.5 percent.

"Yesterday's presidential election in Armenia was conducted mostly in line with the country's international commitments," observers from the Organization for Security and Cooperation in Europe (OSCE) said in a statement.

"Further improvements are necessary to address remaining challenges," it added.

Earlier, Kocharyan congratulated 53-year-old Sarksyan on his victory in what he called free and fair elections.

Ter-Petrosyan's supporters though refused to recognize the result and said they would protest until Sarksyan's victory was overturned. They said Tuesday's vote was marred by ballot-stuffing and intimidation of the opposition.

Between 15,000 and 20,000 protesters gathered at a rally in central Yerevan, chanting "Levon! Levon!" and "Serzh: leave!", a Reuters reporter said.

They were preparing to march towards the Central Election Commission building. Police kept their distance from the protesters.

"Once again we have had our usual shameful election," Ter-Petrosyan told the crowd. "Once again crude force has committed an act of violence against the will of the people."

"We will proceed calmly and with restraint, and with no doubt about our ultimate victory," he said.

HISTORY OF CONVULSIONS

Previous elections in Armenia have been followed by days of opposition protests alleging ballot fraud. A new round of protests will be a test for stability in a country which, in the 1990s, was rocked by political convulsions.

Armenia is squeezed between Turkey and Azerbaijan in a region that is emerging as an important transit route for oil exports from the Caspian Sea to world markets, though Armenia has no pipelines of its own.

Analysts say the unresolved conflict with neighboring Azerbaijan over the separatist territory of Nagorno-Karabakh could flare again into violence, possibly threatening a BP-led oil pipeline that runs next to the conflict zone.

The first country in the world to adopt Christianity as the state religion, Armenia also has fraught relations with Turkey, in part because Ankara refuses to recognize as genocide the killings of Armenians in Ottoman Turkey during World War One.

Kocharyan, who is also 53, is barred by the constitution from serving a third consecutive term. He is expected to remain influential but has refused to disclose what role he wants until his replacement is inaugurated.

He and Sarksyan, both natives of Nagorno-Karabakh and veterans of its 1990s separatist war there, are credited with overseeing a period of double-digit economic growth after economic meltdown under Ter-Petrosyan.

(Writing by Christian Lowe, editing by Dominic Evans)