* Militants also kidnap Islamist politician
* Unrest jeopardising peace process with militants
* Success key to Erdogan ahead of presidential election
By Seyhmus Cakan
DIYARBAKIR, Turkey, May 29 (Reuters) - Kurdish guerrillas shot dead a state-sponsored militia member in southeast Turkey, the armed forces said on Thursday, escalating tensions in the region after days of protests at the building of new military outposts.
Two fighters from the militant Kurdistan Workers Party (PKK) killed "village guard" Mehmet Ugurtay in his van on Wednesday in a primary school courtyard in the southeastern province of Mardin, where he was due to pick up pupils, the army's general staff said.
Village guards are armed and paid by the state, often acting in collaboration with the military, to help protect rural communities against PKK attacks.
"He was killed with one shot from a pistol. The separatist terrorist group members then fled the scene of the incident on motorbike," the general staff said in a statement.
Turkey launched peace talks with jailed PKK leader Abdullah Ocalan in 2012 to try to end a 30-year conflict that has killed 40,000 people and hampered the development of the mostly Kurdish southeast.
The success of the peace process and support from Turkey's Kurds, who account for around a fifth of the population, is key to Prime Minister Tayyip Erdogan ahead of his expected bid for the presidency in an August election.
Some Turkish media said the village guard was a member of the Islamist Huda-Par political party, fierce rivals of the PKK.
Security sources said armed PKK militants have also abducted Huda-Par's local representative in the Dicle district of neighbouring Diyarbakir province, Ercan Alpaslan, after setting up a roadblock and pulling him from his minibus on Wednesday evening.
A day earlier, rebels abducted a soldier during a protest that has forced the closure of highways across Diyarbakir. Security forces are continuing operations to find both men.
The PKK took up arms against Turkey in 1984 with the aim of carving out a separate state in the southeast for the country's Kurds. They have since moderated their demands, seeking increased political and cultural rights which were long denied.
The militants have blocked various points along country roads with trucks and cars seized over the past five days in protest at the construction of several new military outposts, used by the armed forces to maintain regional security.
In Diyarbakir, an 11-day-old sit-down protest outside the city council by families angry at the PKK's recruitment of their children doubled in size on Thursday to 45 families.
Erdogan has staked considerable political capital in peace efforts, widening cultural and language rights at the risk of alienating parts of his grassroots support base. The PKK is designated a terrorist group by Ankara, the United States and the European Union, and Ocalan remains widely reviled among Turks.
A ceasefire called by Ocalan in March 2013 has largely held, but the PKK halted a rebel withdrawal to bases in northern Iraq last summer, complaining at a lack of progress in the process. (Writing by Daren Butler; Editing by Nick Tattersall and Hugh Lawson)