(Recasts, adds quotes, background)
By Katharine Houreld and Jessica Donati
KABUL, March 6 (Reuters) - The Afghan president's older brother, Qayum Karzai, announced on Wednesday he was withdrawing from next month's presidential election and would back former foreign minister Zalmai Rassoul, widely believed to be the president's favoured candidate.
The move will fuel speculation among diplomats and officials in Kabul that President Hamid Karzai is moving to advance the position of Rassoul with the hope that he will retain influence after his term is over.
Karzai, who is constitutionally barred from running for a third term in the April poll, has vigorously denied any intention to become involved in the election and insists he is looking forward to retirement.
But Rassoul is one of the president's closest allies and was long considered to be one of two candidates most likely to secure Karzai's backing, the other being his brother Qayum.
Speaking during an official visit to Sri Lanka, the president said he had asked his brother to withdraw with the purpose of preventing foreign interference in the election.
"You can remember the 2009 election where there was a lot of interference from the outside," Karzai told a conference in Colombo.
"The reason I have been asking my brother to withdraw is because we want to make sure it no longer gives outside forces (the chance) to interfere in an Afghanistan election."
The 2009 polls brought Karzai a second term amid allegations of vote-stuffing, intimidation and interference from both local and foreign officials, including senior U.S. officials.
The pullout was widely anticipated after the elder Qayum Karzai failed to show up for a televised debate this week.
"I will go to every mosque, every room and every guesthouse to get this team elected," Qayum Karzai told Reuters after announcing his withdrawal.
"We are hoping to win on the first round. This team represents the only hope for stability in this country."
Rassoul said negotiations on the election alliance had been taking place for two to three weeks.
The polls are due to take place April 5. If they proceed normally, they will mark the first time in Afghanistan's history that power has been handed from one democratically elected government to another.
But campaigning has kicked off against a backdrop of economic uncertainty and deteriorating security. Taliban insurgents have denounced the vote.
Adding to the pressure, U.S.-led forces are reducing their presence this year and threatening to leave completely unless the new Afghan government signs an agreement that would allow some troops to stay and support Afghan forces.
With just under a month to go before the vote, speculation has heightened about alliances between the hopefuls remaining in the race. All the candidates belong to the majority Pashtun ethnic group except for one who is half-Pashtun but is seen to have the northern Tajik community as his support base.
The Karzai-Rassoul alliance will help to further consolidate the number of Pashtun candidates and those among them who are supporters of the current government.
"We expect other candidates to join us before the election," said Mahmood Karzai, another of the president's brothers. "I'm thinking of at least three candidates."
He declined to name them, but the printed version of his brother's announcement pulling out of the race gave a clue. It said Qayum Karzai would join "the teams of Doctor Zalmai Rassoul and Abdul Rahim Wardak".
Wardak is a former defence minister and considered a close ally of the outgoing president.
Mahmood Karzai said his brother Qayum and Rassoul would campaign separately in order to cover the widest possible area.
The main opposition candidate, Abdullah Abdullah, said he was unconcerned about rivals joining forces. He narrowly lost the 2009 election to Karzai. (Additional reporting by Mirwais Harooni in Kabul and Shihar Aneez in Colombo; Editing by Ron Popeski and Raissa Kasolowsky)
Our Standards: The Thomson Reuters Trust Principles.