UPDATE 2-Uganda's opposition urges protests over polls
* Opposition rejects Museveni victory, calls for re-run
* Police say will not allow demonstrations
* Museveni has threatened to arrest rival over protests
(Recasts, adds opposition quotes, police)
By Barry Malone and Elias Biryabarema
KAMPALA, Feb 24 (Reuters) - Uganda's opposition leader called for peaceful anti-government protests and a re-run of last week's disputed presidential poll on Thursday, but the authorities said demonstrations would not be tolerated.
Kizza Besigye said last week's presidential and parliamentary polls were a sham due to widespread bribery, ballot box stuffing and military intimidation.
"We therefore make a call to action. The time is now for the people of Uganda to rise and peacefully protest against the outcome of the 2011 elections," Besigye, leader of the Inter-Party Cooperation coalition, told a news conference.
After unsuccessfully appealing to the Supreme Court to overturn the results of the previous two polls -- which the court acknowledged had been marred by rigging and violence against the opposition -- Besigye says he has lost faith in the judicial system.
A police spokeswoman said it was too risky to permit demonstrations against incumbent President Yoweri Museveni's election to a fourth term in office.
"We can't allow them to demonstrate, there's already enough tension", police spokeswoman Judith Nabakoba told Reuters.
Clashes between opposition supporters and security forces could rattle the currency -- which tumbled against the dollar before the polls on fears violence could flare up -- and unnerve investors in east Africa's third largest economy.
Electoral commission results handed Museveni 68 percent of the vote, with Besigye trailing on 26 percent. [ID:nLDE71J00T]
An EU observer team has said the power of incumbency was exercised to such an extent as to severely compromise the level playing field between the candidates and political parties.
Besigye, who has now tried and failed three times to defeat former ally and guerilla leader Museveni at the ballot box, said the opposition would not recognise any government formed by his rival.
"It is now very clear that Ugandans cannot advance democracy through elections, the courts or the parliament under Mr Museveni's and the (ruling) NRM leadership," he told several hundred cheering supporters.
Museveni has threatened to arrest Besigye if he incites unrest and send demonstrators to jail. His rival has repeatedly warned Uganda is ripe for an Egypt-style uprising although some analysts question the popular appetite for unrest.
The police spokeswoman said protesters could be prosecuted.
"The public should desist from following the orders of those politicians because during the demonstrations people will commit crimes and they will be held individually accountable."
A Reuters witness said a large number of troops were patrolling the streets of the capital Kampala.
"We can chose to remain slaves in our country, we can chose to be subjugated by Museveni or we can chose to be the owners of our country and to be masters of our land," said Olara Otunnu, leader of the Uganda Peoples Congress, flanking Besigye. (Writing by Richard Lough; editing by James Macharia and Philippa Fletcher)
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