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El Salvador ex-rebels win power through ballot box

* Ex-guerrillas finally win power

* Ruling conservatives ousted after 20 years

* Economic crisis weighs

SAN SALVADOR, March 16 (Reuters) - El Salvador’s former Marxist guerrillas, who fought one of the bitterest conflicts of the Cold War, finally won power through the ballot box after a tight election victory over their right-wing civil war foes.

After years as a peaceful opposition party, the Farabundo Marti National Liberation Front, or FMLN, cashed in on fatigue over the ruling party’s 20 years in office and fears of the world economic crisis to narrowly take Sunday’s presidential election.

FMLN candidate Mauricio Funes, a former TV journalist, beat ARENA’s Rodrigo Avila by nearly 3 percentage points, scotching the notion that the ex-rebels were unelectable due to their violent past and El Salvador’s pro-U.S. history.

Funes, 49, never fought in the 1980-92 civil war and he urged unity and reconciliation with the ruling party, whose founder was closely associated with death squads during the conflict.

“From this moment on, I invite the different social and political forces to build this unity together,” he said.

ARENA has held office since 1989 and kept the coffee-exporting Central American country firmly in the pro-Washington camp, even sending small contingents of troops to help U.S. forces in Iraq.

But poverty and street crime have helped the FMLN, which fought vastly better-equipped forces armed by the United States at a cost of billions of dollars. The guerrillas laid down their weapons under a 1992 peace deal.

The nearest the rebels came to taking power was in late 1989 when they poured into the capital in an offensive that was only halted when the military bombed and shelled guerrilla positions in residential areas.

“This victory ... has cost years of fighting, sacrifice and blood,” said FMLN lawmaker Orestes Ortez after the election win.


The U.S. recession has dampened the demand for El Salvador’s exports like textiles and manufactured goods, despite a regional free trade deal with the United States.

Funes said his first priority would be tackling the impact of the global financial crisis on El Salvador, a largely poor country but with stunning landscapes dotted with volcanoes, lakes and verdant hillsides.

“There is no time to lose. From tomorrow we will start taking the necessary decisions,” he said.

Funes says he will crack down on tax evasion and use the funds to create jobs for Salvadoran immigrants returning from the United States. He also vows to invest in farming to reduce dependence on imported food.

The victory for Funes was a boost for left-wing leaders in Latin America, led by Venezuelan President Hugo Chavez, but Funes says he is a moderate who will maintain El Salvador’s close ties with Washington.

Funes says he is pro-business but his vice president-elect, Salvador Sanchez, is an old school FMLN hard-liner who could take policy to the left.

Losing candidate Avila said his conservative party would make sure El Salvador does not become authoritarian under the FMLN.

“We will be a constructive opposition, an opposition that is vigilant so that liberties are not lost in our country,” he told supporters.

About a quarter of El Salvador’s population -- some 2.3 million people -- live in the United States and the money they send home is key to the economy. (Additional reporting by Anahi Rama, and Alberto Barrera; Writing by Alistair Bell; Editing by Eric Beech)