* Election seen as referendum on peace talks
* Both candidates are market friendly (Updates with Santos taking lead)
By Julia Symmes Cobb
BOGOTA, June 15 (Reuters) - President Juan Manuel Santos took a solid lead in Colombia's election on Sunday in a contest that will determine whether the country moves ahead with peace talks with Marxist rebels to end a 50-year war.
Santos, who cast the election as a choice between peace and war, was leading with 50.5 percent support against 45.3 percent for his right-wing challenger Oscar Ivan Zuluaga with votes in from more than three-quarters of polling stations.
Santos began talks with the Revolutionary Armed Forces of Colombia (FARC) in 2012, aiming to end a conflict that has killed over 200,000 people and forced millions more from their homes.
He made the pursuit of peace the centerpiece of his campaign.
Santos, 62, announced this week that preliminary talks had begun with the nation's second biggest insurgent group, the National Liberation Army.
Zuluaga, 55, who accuses Santos of negotiating with terrorists, said he would impose new conditions on the drug-funded FARC like prison terms for serious crimes and a ban on political participation should he win.
His vow to suspend peace talks after taking office helped win over hard-line opponents of the negotiations, but he softened that stance after the first round of voting last month in an apparent effort to attract moderate voters.
(Reporting by Julia Symmes Cobb; Editing by Helen Murphy and Kieran Murray)