* Abdulla Yameen beats favourite in victory for old guard
* Role of Islam central to election campaign
* Tourism in island paradise hit last year by turmoil (Adds reaction, details, quotes)
By J.J. Robinson
MALE, Nov 16 Abdulla Yameen won the Maldives presidential election run-off on Saturday, narrowly defeating the favourite Mohamed Nasheed in a ballot that voters hoped would end two years of political turmoil that has hit the vital tourism sector.
The crisis occasionally spilled over into violent protests in the Indian Ocean holiday paradise after Nasheed, the Maldives' first democratically elected president in 2008, was forced to resign early last year in what he said was a coup.
Three previous attempts to hold the election were annulled or delayed in as many months and, although Nasheed led the first round a week ago, Yameen had the support of resort tycoon Gasim Ibrahim, who was eliminated in that ballot.
Yameen's win, with a preliminary 51.6 percent of votes cast, was a victory for the old guard. He is a half-brother of Maumoon Abdul Gayoom, who ruled for 30 years and is considered a dictator by rights groups and opponents. Gasim was also Gayoom's finance minister.
Gasim said the outcome would reinforce the role of Islam in the Muslim island state: "We joined you (Yameen) to save this country, to maintain Islam in the country, and I thank Allah for the success."
During a bitter election campaign, Yameen and his backers accused Nasheed and his Maldivian Democratic Party (MDP) of being too secular and close to the West.
Nasheed countered that his opponents had used religion unfairly as a weapon, amid concerns that Islamist ideology was beginning to take hold.
DICTATORSHIP OR DEMOCRACY?
After the ballot, a defiant Nasheed addressed hundreds of MDP supporters and later told reporters he would carry on in opposition.
"We have the opportunity to show citizens how an opposition party that is loyal to the state works. One thing we should not contemplate (is) to overthrow the government by street action or by direct action," the 46-year-old added.
"We must adhere to democratic principles. We have repeatedly said, when you fall get up and run. When you lose, be courageous and in victory, be magnanimous."
The Election Commission has yet to confirm the final vote count from an electorate of around 240,000 people, and may not do so until Sunday. But local observer group Transparency Maldives said the election was "credible, transparent, and extremely well-administered."
Some Maldivians viewed the ballot as a choice between dictatorship and democracy.
"This is the end of democracy in the Maldives," said Ismail Hilath Rasheed, a human rights activist and blogger who has been living in exile since he was stabbed by an Islamist last year.
"This is because of religious conservatism planted by Gayoom and extremists."
But others focused on Yameen's earlier success in charge of several state-run firms - experience that could help him win back the confidence of investors.
"Yameen has experience running companies, so he will know how to run the country better," voter Ahmed Abu Bakr, 27, said. "Nasheed's better as an activist, so he can be the opposition."
Yameen must win over overseas companies after the government cancelled the Maldives' biggest foreign investment project with India's GMR Infrastructure.
High levels of debt and a lack of foreign currency reserves also make the idyllic archipelago vulnerable to external economic shocks. Tourism receipts contributed 38 percent of government revenue last year. (Additional reporting by Shihar Aneez in Colombo; Writing by Mike Collett-White; Editing by Janet Lawrence)