* Prelim results give president 85 pct of votes counted
* OSCE says vote failed to meet its standards
* Kyrgyzstan opposition rejects election results
* EU presidency backs observer criticism
(Adds EU quotes)
By Maria Golovnina and Olga Dzyubenko
BISHKEK, July 24 (Reuters) - Kyrgyzstan's president won a second term by an overwhelming margin on Friday, but opponents and Western observers harshly criticised the election in the Central Asian country, a focus of U.S.-Russian rivalry.
Washington and Moscow have military air bases in the country, which lies in the vast, conflict-prone region north of Iran and Afghanistan. Both have expressed concern about what they regard as a rise in Islamic militancy in the region.
The central election commission said President Kurmanbek Bakiyev had won 85.4 percent of Thursday's vote, with 73 percent of ballots counted. Opposition rival Almazbek Atambayev, who has denounced the vote as rigged, had 7.5 percent.
"Sadly this election did not show the progress we were hoping for," said Radmila Sekerinska, head of the observation mission from the Organisation for Security and Cooperation in Europe. "It again fell short of key standards Kyrgyzstan has committed to as a participating state of the OSCE."
The election watchdog said the vote was marred by ballot box stuffing, inaccuracies in voter lists and multiple voting.
"The conduct of the election day was a disappointment. The vote count and the tabulation of results in particular were of concern. This part of the process was assessed as negative in more than half of all the cases our observers had witnessed," Sekerinska told reporters.
Accused by opponents of exaggerating the Islamist threat to shore up his own power, Bakiyev has vowed to use all means to preserve stability and prevent unrest.
"Bakiyev lost this election. Kyrgyzstan has no legitimate president. He could have easily been given 190 percent," Atambayev, a former prime minister, told Reuters.
Bakiyev's office could not be reached for comment on Friday.
The Swedish EU presidency endorsed the OSCE's report and said the EU stood ready "to assist Kyrgyzstan in its efforts to bring the election process into line with OSCE commitments and other international standards for democratic elections".
"The election was clearly a step in the wrong direction. It was a mess," said a Western observer who asked not to be named.
A nation of mountain villages, clan rivalries and nomadic traditions, Kyrgyzstan was calm on Friday after a day of tension. Life in the capital Bishkek, its low skyline shimmering in the intense summer heat, also appeared to go back to normal.
The West is concerned with Bakiyev's increasingly authoritarian stance but it also views stability in Kyrgyzstan as key to its efforts to insulate Central Asia against the spread of militant Islamism from Afghanistan and Pakistan.
The opposition said it planned more protests. Atambayev said his observers had documented widespread cases of people submitting multiple ballots, and a number of his monitors had been harassed at polling stations.
The central election commission played down these concerns. "The election was conducted in a calm and friendly atmosphere," said commission chairman Damir Lisovsky.
On Friday, state television showed lengthy live reports of Lisovsky's team debating in detail a 84-page report on election fraud submitted by the opposition. The general prosecutor's office is also due to look into them for a legal review.
Potential instability in Kyrgyzstan is of concern to the United States, which uses its Manas air base there as a transit point for its troops fighting in Afghanistan.
Kyrgyzstan's southern Ferghana valley, viewed by the government as a hotbed of extremism, has been the scene of a string of gunbattles over past months between state troops and attackers identified by the government as Islamist rebels.
"Overall, a Bakiyev victory would signal policy continuity," Eurasia Group said in a research note.
"But in the longer term, the level of macro-level political risk is relatively high in Kyrgyzstan. The country's political institutions are weak, corruption is endemic, and organized crime permeates the top levels of government." (Editing by Ralph Boulton and Robert Woodward)