By Joseph Logan
SANAA, Feb 20 (Reuters) - A blast tore through a polling station and gunfire nearby killed a soldier in south Yemen on Monday, the eve of a presidential election to replace Ali Abdullah Saleh and launch reforms after a year of mass protests and spreading anarchy.
The violence in the port of Aden underlined the challenges Saleh's successor will face in seeking to prevent Yemen from becoming a failed state and draft a new constitution that would underpin multi-party elections in two years' time.
After the explosion, which caused no casualties, unidentified gunmen opened fire on an army patrol in the vicinity, killing a soldier and wounding another, a security official said. It was unclear if the two incidents were related.
A vehicle carrying ballot boxes had been attacked a day earlier. Interior Minister Abdul Qader Qahtan said security measures were in place but that some violence in the southern province of Abyan, an al Qaeda stronghold, was unavoidable.
"There are preventive security measures to confront any contingency ... to confront any group that may attack people," Qahtan said. "Abyan still has many districts under the control of al Qaeda, there are security failures ... and an explosion here and there is expected."
The fact that Vice President Abd-Rabbu Mansour Hadi will be the only candidate in the election, under a power transfer deal brokered by Yemen's Gulf neighbours, has raised concern about a low turnout that would curb his legitimacy.
The vote would 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 a transition towards stable representative government remain uncertain at best given Saleh's vow to return home to lead his party anew, a split in the military, al Qaeda militants entrenched in the south, a Houthi Shi'ite Muslim revolt in the north and a secessionist movement in the south.
"These elections are an important milestone for Yemen's transition," said U.N. Yemen envoy Jamal Benomar.
"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."
HADI IN SPOTLIGHT
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."
Tuesday's vote is part of a deal hammered out by the six-nation Gulf Cooperation Council, 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 Hadi's proximity to Saleh and his involvement in a process conceived by diplomats has alienated the Yemeni street, where thousands have camped in shabby tent cities demanding Saleh's removal.
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 key 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. "There is still a high level of distrust and a lack of confidence between the two sides."
TROUBLE IN THE NORTH
A brewing conflict 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.
The 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.
There is ongoing fighting between the Houthis, who are members of the Zaydi branch of Shi'ite Islam, and Salafis - Sunni Muslims whose puritanical creed mirrors doctrines widespread in Saudi Arabia.
"We do definitely see a rise in Iranian finance, efforts on the part of Iran to increase its influence not only with Zaydi Shia elements but with Sunni elements as well," Feierstein said.
"We do think that we have evidence of Iranian activities that will build up military capabilities as well. It's a relatively recent phenomenon. Iran is taking advantage of this period of political instability and loss of government control over large parts of the country."
Iran denies meddling in Yemen.
The Shi'ite Houthis have regained some of the momentum they lost when Saudi Arabia sent troops to the porous 1,460 km (910 mile) border in 2009 to intervene when Saleh's forces struggled to suppress the rebellion.
The biggest fear is that Yemen's north becomes the stage for a proxy war between Iran and Saudi Arabia, backed by the United States. Washington is leading international efforts to isolate Iran over its nuclear programme, which many countries believe is aimed at building atomic bombs, a charge Tehran denies.
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)