* Yemenis voting in new president after year of upheaval
* Spate of violence casts shadow on Tuesday's election
* Explosion batters polling station, gunfire kills soldier
* U.S. says Iran taking advantage of Yemen's instability (Adds militants arrested, tribesmen killed, Saleh quote)
By Mohammed Mukhashaf and Joseph Logan
ADEN/SANAA, Feb 20 (Reuters) - An explosion tore through a polling station and gunfire nearby killed a soldier in Yemen on Monday, the eve of a presidential vote to replace Ali Abdullah Saleh after a year of mass protests and spreading anarchy.
A spate of violence in south and east Yemen underlined the challenges Saleh's successor will face as he seeks to prevent the country sinking onto chaos.
Interior Minister Abdul Qader Qahtan said in the capital Sanaa that security measures were in place but some violence in the southern province of Abyan, a stronghold of al Qaeda militants, was unavoidable.
"There are preventive security measures to confront any contingency ... to confront any group that may attack people," Qahtan told a news conference. "Abyan still has many districts under the control of al Qaeda. There are security failures ... and an explosion here and there is expected."
The explosion at the polling station in the southern city of Aden caused no casualties but one soldier was killed and another injured when unidentified gunmen opened fire on an army patrol in the vicinity.
It was unclear if the two incidents were related.
Southern separatists seeking to revive a socialist state that Saleh united with the north in 1990 oppose Tuesday's vote, which has been touted by diplomats as a turning point for the country following a year of political upheaval.
In another southern province, Dalea, troops opened fire on an anti-election protest march, killing one protester and wounding nine, a leader of the Southern Movement said.
A local official said the march was unauthorised and protesters waving southern flags had shot at soldiers, wounding one.
Southern activists, who accuse the north of taking their resources and discriminating against them, have said they will boycott the election because they want no part in a process orgainsed across both halves of the country.
Residents of Dalea said armed secessionists had set up checkpoints on the main roads to prevent ballot boxes from being delivered to polling stations.
Islamist militants linked to al Qaeda have also exploited weak central government control to expand their foothold in the south, seizing several towns over the past year.
Unidentified gunmen attacked a polling station in the city of Sioun in the eastern province of Hadramout, besieging it for several hours until security reinforcements arrived to disperse them, killing one and arresting two in the ensuing clashes, a local official said.
Security forces also arrested three suspected al Qaeda militants who were preparing explosive material in a residential quarter of the town of al-Khadra in the southern Lahej governorate, an official said.
Militants in the town of Lawdar in Abyan province, which borders Lahej, ambushed and killed two pro-government tribesmen, a tribal source said.
UNCERTAINTY
In what was likely his last speech as president, Saleh urged Yemenis to go to the polls and vote for Vice President Abd-Rabbu Mansour Hadi, the only candidate in the election, as laid out in a power transfer deal brokered by Yemen's Gulf neighbours.
"This event comes within the framework of implementing what we adopted for the sake of a peaceful transition of power to lift our good country and steadfast people from the suffocating and bitter crisis which has lasted a whole year," Saleh said.
The vote will make Saleh, now in the United States for further treatment of burns suffered in a June assassination attempt, the fourth Arab autocrat to leave office in a year after revolts in Tunisia, Egypt and Libya.
But prospects for stability remain uncertain given Saleh's vow to return home to resume leadership of his party, a split in the military, al Qaeda militants entrenched in the south, a Houthi Shi'ite Muslim revolt in the north and the secessionist movement in the south.
"The new government should more actively engage with youth, the Houthis and the Southern Movement. The political process will remain in jeopardy if these constituencies remain outside the political process," said U.N. Yemen envoy Jamal Benomar.
In a speech late on Monday, Hadi said Yemen had returned from the brink of collapse and called on the splintered military to help unify the Arabian Peninsula state, where chaos would threaten nearby oil shipping lanes crucial to the world economy.
"In the past months Yemen has passed through unprecedented hardship, to the point where the most optimistic of observers expected it to become as fragmented, splintered and destroyed as Somalia," Hadi said.
"We cannot talk about a stable nation without returning life to its natural state and removing the phenomena which have appeared, beginning with the split in the army."
MILITARY STANDOFF
Tuesday's vote is part of a deal hammered out by the six-nation Gulf Cooperation Council (GCC), anxious to avert a slide into lawlessness on their doorstep.
Backed by the United States, the United Nations and European Union, the deal envisages a new constitution and a referendum paving the way for a multi-party election in two years.
But many Yemenis remain sceptical about the prospects of a real political transformation, given Hadi's close links with Saleh and the lack of an alternative candidate.
The deal's offer of immunity to Saleh from prosecution over the killing of protesters has only deepened those suspicions.
"The elections are a political scenario mapped out in the GCC initiative but in its essence it is irrelevant to the true ideals of democracy," said Rana Jarhoum, 29, development worker. "Hadi is going to be elected anyway."
Many also suspect that Hadi will be no more than a caretaker, put in place by Saleh, who has vowed to return after the vote and lead his General People's Congress (GPC) party.
Members of Saleh's inner circle retain pivotal positions of influence, not least his son Ahmed Ali, who commands the Republican Guards, and Yehia, his nephew, who heads the Central Security Forces. They are locked in a stand-off with tribal leader Sadeq al-Ahmar and dissident General Ali Mohsen.
"The continuation of a divided military cannot be sustained. We have to have a reintegrated and reunified military leadership," said U.S. Ambassador Gerald Feierstein.
TROUBLE IN THE NORTH
A conflict brewing in the north could also complicate any return to stability and tap into longstanding concerns on the Arabian Peninsula that Shi'ite power Iran was trying to exploit Yemen's instability to spread its Islamic revolution.
"We do see Iran trying to increase its presence here, in ways that we believe are unhelpful to Yemen's stability and security," Feierstein told Reuters in an interview.
Iran denies meddling in Yemen.
The Shi'ite Houthi rebels, who draw their name from a tribal leader, have effectively carved out their own state-within-a state thanks to a weakened central government.
Some analysts fear Yemen's north could become the stage for a proxy war between Iran and Saudi Arabia, backed by the United States. Saudi Arabia, the world's No. 1 oil exporter and close U.S. ally, has accused Iran of fomenting unrest among Shi'ite populations in its east and in neighbouring Bahrain. (Additional reporting by Isabel Coles in Dubai and Tom Finn in Sanaa; Writing by Reed Stevenson; Editing by Mark Heinrich and Andrew Heavens)
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