* Three parties agree to form coalition
* Almazbek Atambayev nominated as prime minister
* Explosion damages makeshift court in Bishkek
* Political opponents, militant Islam threaten stability
(Adds details, explosion, background)
By Olga Dzyubenko
BISHKEK, Nov 30 (Reuters) - Political leaders in Kyrgyzstan agreed on Tuesday to form a coalition government as the Central Asian state tries to create the region's first parliamentary democracy following months of violence and upheaval.
Underscoring the troubles facing the new government, an explosion in the capital Bishkek wounded three people outside a makeshift court where several people are on trial, accused of mass killings in an April uprising that ousted the president.
Kyrgyzstan, a former Soviet republic that hosts Russian and U.S. military air bases, held elections on Oct. 10 that resulted in five parties winning seats in a new legislature designed to devolve power to the prime minister from the president.
The vote failed to produce a clear winner in a country split by political and clan rivalries, where more than 400 people were killed in June during clashes between ethnic Kyrgyz and Uzbeks.
After weeks of wrangling, three parties agreed to join forces to form a majority, said Tashpolot Baltabayev, acting speaker of parliament. "The document has already been signed and a coalition is in place," he said. The agreement comes two days before U.S. Secretary of State Hillary Clinton is due to visit Kyrgyzstan, and avoids the need for a repeat election that would have resulted from three failed attempts to build a coalition.
Kyrgyzstan is alone among the former Soviet republics of Central Asia in pursuing a parliamentary government model after 20 years of failed authoritarian rule that has twice resulted in the overthrow of a president.
Under the new model, backed by the United States but previously criticised by the Kremlin, parliament will be the country's main decision-making body and the prime minister will assume more power than the president.
Almazbek Atambayev, leader of the Social-Democratic Party of Kyrgyzstan, has been nominated as prime minister. His party, which finished second in the election, will form the coalition government along with the Respublika and Ata Meken parties.
Respublika leader Omurbek Babanov has been nominated as deputy prime minister and Ata Meken leader Omurbek Tekebayev will become the speaker of parliament.
Ata Zhurt, which won the most votes in the election, and the Ar-Namys party led by pro-Russian politician Felix Kulov declined to join a coalition government. Both parties have expressed opposition to the parliamentary form of government.
Atambayev was deputy to Roza Otunbayeva, now acting president, in the interim government that took power following the revolt in April that toppled President Kurmanbek Bakiyev.
COURT EXPLOSION
More than 20 people are now on trial accused of taking part in the killings on April 7, when forces loyal to Bakiyev -- who is now exiled in Belarus -- shot into crowds in a square in central Bishkek. Officials say 87 people were killed.
On Tuesday, an explosion blew out the windows of the sports palace where the trial is taking place. Two policemen were among three people wounded, the Health Ministry said. Officials said the explosives were detonated by remote control or mobile phone.
"The blast was aimed at disrupting the court and the process of democratisation. We will not return to a situation of totalitarian family leadership," Marat Imankulov, head of Kyrgyzstan's Security Council, told a news conference.
The first day of the trial on Nov. 17 descended into chaos when relatives of the deceased broke through police lines and demanded that the accused be executed. Three of the defendants subsequently fled their homes to avoid standing trial.
Knut Vollebaek, the Organisation for Security and Cooperation in Europe's (OSCE) High Commissioner on National Minorities, said Kyrgyzstan's new government must address the grievances of minority groups if it is to restore order.
"Whatever coalition government comes to power, it will be confronted with a task of reconciling ethnic communities, integrating national minorities and building sustainable peace in the country," he said before an OSCE summit in Kazakhstan.
Authorities are also concerned about a rise of radical Islam in Kyrgyzstan, as grinding poverty attracts young people to militant groups and hardened fighters filter back into Central Asia after years fighting with the Taliban in Afghanistan.
On Monday, Kyrgyz authorities said four Islamist militants were killed during a raid in the southern city of Osh, the focal point for the ethnic bloodshed in June. One died when he detonated a grenade, the Security Council said. [ID:nLDE6AS19B] For a FACTBOX on the Kyrgyz parliament: [nLDE6AT0OQ] For an ANALYSIS on the Kyrgyz parliament: [ID:nLDE6A0145] For an OSCE interview on Kyrgyzstan: [ID:nLDE6AS0SM] (Writing by Robin Paxton in Astana; Editing by David Stamp)
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