MAHALLA EL-KUBRA, Egypt (Reuters) - Party agents flooded the streets with banners and verses from the Koran as the third phase of Egypt's parliamentary election began on Tuesday, with Islamists trying to dominate an assembly that will rival the clout of the ruling generals.
The army faced anger over its handling of protests that left 17 people dead in Cairo last month and an economic crisis has made it harder to meet the aspirations of citizens yearning for a better life since the overthrow of President Hosni Mubarak.
In an industrial region north of Cairo where labor disputes over low wages preceded the wider protests that brought down Mubarak, optimism was high as residents lined up to vote.
"I am glad to be alive to witness this - a free election in Egypt," said Ahmed Ali al-Nagar, a carpenter in his late 50s from Mahalla el-Kubra. "Workers had a big impact on the political outcome we are living through these days."
Islamists came late to the uprising that unseated Mubarak in February, but were well placed to seize the moment when Egyptians were handed the first chance in six decades to choose their representatives freely.
The military says the parliamentary vote will not be derailed by the eruptions of violence.
The Muslim Brotherhood's Freedom and Justice Party (FJP) led after the first two rounds, and the strong showing by Islamist movements has sown unease among Western powers that only disowned Mubarak when his three-decade rule was crumbling.
Many citizens see the first fair election they can remember as a chance to end the blight of incompetent leadership and a culture of venality among the powerful that enriched a few and left millions in poverty.
The concluding vote to parliament's lower house takes in regions of the rural south, which has the largest proportions of Christian voters, the Nile Delta region north of the capital Cairo, and the restive Sinai desert region to the east.
Turnout has been far higher and the election atmosphere less tense than in Mubarak's day, when ballot stuffing, thuggery and vote-rigging guaranteed landslide wins for his party.
In Mahalla and the wealthier city of Mansoura, queues at polling stations were shorter than in previous rounds but voting appeared orderly.
Streets were dotted with the posters of parties, especially the Brotherhood and hardline Islamist al-Nour party, promising an end to corruption.
"I have chosen to vote for the Freedom and Justice Party as I like its talk and I think it has a long history and experience and I think they will help us the most," said Amany al-Mursy, a smiling middle-aged woman from Mansoura.
"And if it does not do as we hoped, Tahrir Square is still there. If something goes wrong, we will go out and say something is wrong and remove the wrong people and replace them."
Egyptians turned out in unprecedented numbers in the first two rounds and parties ranging from hardline Islamists to liberals and secularists are competing hard for every vote.
Brotherhood banners in Mahalla carried its motto "Islam is the solution" alongside its FJP party logo, in defiance of a ban on religious slogans. In Minya in the rural south, some campaign banners carried verses from the Koran.
Flyers for the hardline Islamist al-Nour party carried names of influential families who had lent their support. Nour drew on the grass-roots influence of the Salafi clerics who founded it to take second spot in the first voting rounds.
Monitors praised the first two rounds as relatively free of irregularities, while noting that many parties had defied a ban on campaigning outside polling stations in election day.
But police raids on pro-democracy and rights groups last week have disrupted the work of leading Western-backed election monitors and drawn accusations that the army was deliberately trying to weaken oversight of the vote and silence opponents.
The government said the raids were part of an investigation into illegal foreign funding of political parties and not aimed at weakening rights groups, which have been among the fiercest critics of the army's rule.
The United States called on Egyptian authorities to halt "harassment" of the groups involved. Egypt's government said some of the groups had no permits to operate in the country.
The U.S.-funded International Republican Institute (IRI) said it was invited by Egypt's government to monitor the election and gave no funding to parties or civic groups.
It urged the government to let staff return to their offices and obtain the official permits they had long requested and said there was no reason to stop it monitoring the vote.
Another U.S.-backed group, the National Democratic Institute (NDI), said it was pressing ahead with monitoring even though police had not returned equipment, documents and money they seized without providing a warrant or an inventory.
"NDI hopes that the confiscated items will be returned promptly," it said, so the group can "resume a constructive dialogue with the appropriate authorities about its work and legitimate efforts to support the democratic process in Egypt."
Fourteen million eligible voters in nine regions were choosing who occupies 150 of the seats in parliament. The staggered lower-house election concludes with a run-off vote on January 10 and 11, with final results expected on January 13.
Reporting by Yasmine Saleh, Tom Pfeiffer and Tamim Elyan; Writing by Tom Pfeiffer; Editing by Andrew Heavens