* Diallo concedes presidency to Conde
* Capital calm, businesses open
* Court throws out complaints of fraud by rival
* Poll was first free vote since independence
* Conde faces tough test to form government
(Updates with Diallo acceptance of defeat)
By Saliou Samb
CONAKRY, Dec 3 (Reuters) - Guinea's Cellou Dalein Diallo conceded defeat on Friday to presidential rival Alpha Conde after the country's top court confirmed the results of last month's run-off.
The Nov. 7 run-off election was Guinea's first free vote since independence from France in 1958 and is meant to draw a line under almost two years of military rule in the world's top exporter of the aluminium ore bauxite.
The Supreme Court validated provisional results giving Conde 52.52 percent and threw out allegations of fraud launched by Diallo's party.
"Our complaints were not taken into account," Diallo told a news conference. "Since the decision of the Supreme Court cannot be appealed ... we have no choice but to conform to the decision made by the top legal institution in the republic."
By midday, Conakry's sprawling neighbourhoods -- the scene of deadly violence in recent weeks between Diallo-backers and security forces -- were calm with shops and banks open and traffic flowing as usual.
"We all prayed for God to give us a good leader." said Abdoulaye Sylla, a 30-year-old city resident. "Alpha has won, so we need to support him."
For Conde the final result is a dramatic turnaround of the first round of the vote in which Diallo took a commanding lead of around 44 percent to Conde's 18 percent.
Yet it also underlined how much Guinean politics is driven by ethnicity as in the end Diallo was unable to extend his share of the vote much past the Peul community that makes up around 40 percent of the population.
Those ethnic tensions spilled over into violence before and after the vote, with one human rights group saying 10 people had been been killed and 215 others injured in clashes since provisional election results were announced last month.
TESTS AHEAD
Conde has offered to include Diallo's allies in a government of national unity, a move aimed at soothing ethnic tensions. The transition to civilian rule could provide legal certainty for billions of dollars of investment by mining firms in Guinea's bauxite and iron ore riches.
A former assistant professor at the Sorbonne and a friend of former French Foreign Minister Bernard Kouchner, Conde, 73, has prided himself in not having worked for any of the succession of strongarm rulers Guinea has seen since independence.
Conde has weathered many storms as chief critic of past governments: exile and a death sentence under former dictator Sekou Toure, prison under General Lansana Conte, and insults under former junta leader Moussa Dadis Camara.
But his ability to govern will come under scrutiny as he faces a number of tests ranging from reform of an unruly military to rebuilding an economy that has been devastated by years of mismanagement and corruption.
Reforming Guinea's mining industry will be high on his list of priorities, and like Diallo he has signalled that existing contracts would be put to review.
Aside from being the world's largest exporter of bauxite -- with about a third of the world's known reserves -- Guinea holds vast iron ore riches that have attracted billions of dollars in planned investments from companies such as Vale <VALE5.SA> and Rio Tinto <RIO.AX>.
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