UPDATE 2-France's Hollande nods to right on immigration, veils
* Socialist Hollande says economic immigration must be limited
* Presidential frontrunner would uphold burqa ban
* Sarkozy defends immigration issue as central to all voters
PARIS, April 27 (Reuters) - Frontrunner Francois Hollande gave nods on Friday to far-right voters who could decide the outcome of France's presidential election, saying he would limit immigration and uphold a ban on women wearing Islamic veils in public.
Hollande, a Socialist, is on course to win a May 6 runoff against centre-right President Nicolas Sarkozy. Sarkozy's only hope for victory is to win over the record number of voters who picked the far-right National Front in Sunday's first round.
Sarkozy has swung hard to the right on immigration and Islam in the week since National Front leader Marine Le Pen won 17.9 percent of the first round vote. Hollande has been more reluctant to court National Front voters openly, but has said their anger should be heard.
"In a period of crisis, which we are experiencing, limiting economic immigration is necessary and essential," Hollande said on Friday.
A day earlier, Hollande had answered evasively when asked repeatedly on prime-time television whether he thought there were too many foreigners in France, as Sarkozy and Le Pen have both proclaimed in campaign speeches.
Clarifying his position after his evasions drew criticism, he told RTL radio on Friday that if elected, he would have parliament fix an annual quota for non-European Union foreigners coming to France to take up jobs.
"There will always be legal immigration. Can the number be reduced? That's the debate," Hollande said, noting Sarkozy had already reduced the government's annual target for economic migrants to 20,000 from 30,000.
"In my view, that's the kind of level that would apply in times of crisis. In any case, the numbers will be managed."
Hollande also said he would uphold and enforce a ban on face-covering veils worn by Muslim women, even though he abstained in a 2010 parliamentary vote when Sarkozy proposed it.
His comment seemed designed to counter attempts by Sarkozy to paint him as soft on radical Islam, notably by alleging that a Swiss Muslim scholar had endorsed Hollande for president. The scholar, Tariq Ramadan, has denied backing a candidate.
Sarkozy accused Hollande of skirting tough issues like immigration: "Ten days from the election we still don't know what would be the immigration policy for the next five years," Sarkozy said at a rally in Dijon eastern France.
The huge vote for Le Pen revealed frustration among voters over a relentless rise in unemployment. She proposes preferences for French nationals for jobs, welfare benefits and public housing, and penalties for firms that hire illegal immigrants.
Five years ago, Sarkozy successfully appealed to far-right voters in the second round to secure his first presidential term. But he faces a more difficult task this time around because of economic hardship.
HOLLANDE TREADING CAREFULLY
An election race dominated from the start by the economy has now boiled down to whether Sarkozy can lure enough of Le Pen's supporters to his side in the runoff to eat into Hollande's lead of between 6 and 10 percentage points in polls taken this week.
Both candidates hold political rallies at the weekend and will come face to face in their sole televised debate on May 2.
A Harris Interactive survey published on Friday found that 31 percent of Le Pen voters plan to abstain on May 6, while 48 percent would vote for Sarkozy and 21 percent would back Hollande. Most tallies suggest Sarkozy would need as much as 80 percent of Le Pen's vote to win the run-off.
If he loses again in the second round, Sarkozy will be the first president voted out of office in more than 30 years.
Piling more pressure on him, jobless claims rose for the 11th month running in March to hit their highest level since September 1999.
Foreign commentators have criticised the presidential contenders for focusing too heavily on secondary domestic issues and not addressing issues like labour market flexibility.
Financial markets are fretting anew about the risk that anaemic economic growth will derail deficit-cutting targets in the No. 2 euro zone economy, which has promised to bring down its budget shortfall to 3 percent of output in 2013.
Inside France, media debate remained centred on the new far-right pull of the election race. On Thursday Sarkozy proposed changing the law to protect police who shoot suspects from criminal charges.
Former prime minister Dominque de Villepin, a bitter foe of Sarkozy who failed to win the backing to run as an independent centre-rightist in the election, said the conservatives were going down a "path of no return". He said the hardline rhetoric was "a deadly poison that is threatening the right."
"Everything is happening as though there were only National Front voters in France, as if there were no other issues but halal meat and legal immigration," Villepin wrote in Le Monde.
Even before the first round, Sarkozy was hammering hard on the need to curb immigration and protect French producers from cheap competition. On Friday, he lashed back at suggestions that he was leaning too far to the right and insisted that Le Pen supporters had legitimate concerns that needed to be addressed.
"Mr. Sarkozy is not supposed to speak to the six and a half million French people (who voted for Le Pen)... But no one is going to stop me from speaking to all French people," he said.
Hollande hit back at a campaign rally in the city of Limoges, accusing Sarkozy of veering dangerously to the right.
"He says the right should not have taboos. However, it's not a question of taboos, but rather transgression."
The focus on Le Pen voters since Sunday has left Hollande with the dilemma of how to reach left-wing defectors to the National Front by voicing understanding of economic gloom while not taking any position that would offend his core support base.
A BVA poll released on Friday showed Hollande gaining 1.5 percentage points to 54.5 percent of voter intentions for the second round versus 45.5 percent for Sarkozy. A CSA poll showed a narrower lead with Hollande at 54 percent, down 2 points from last week, and Sarkozy at 46 percent.
The Harris Interactive survey found that of those voters who backed centrist Francois Bayrou in round one, 41 percent would back Hollande on May 6 and 36 percent would back Sarkozy.
Bayrou, who won 9.1 percent in the first round, has not yet endorsed either rival. Hollande and Sarkozy have written to him and Hollande said he saw common ground on education, social issues and public finances.
Hollande also stands to benefit from the backing of nearly all those who supported hard leftist Jean-Luc Melenchon, who won 11 percent in the first-round vote. Melenchon has refused to campaign with Hollande, however.
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