By Irja Halasz
ULAN BATOR (Reuters) - A riot in Mongolia's capital overalleged election fraud has killed five people, dampening hopesfor a period of stable government to develop the mining sectorand tackle inflation.
President Nambariin Enkhbayar declared a four-day state ofemergency late on Tuesday after protesters upset over lastweekend's election clashed with police and set fire to theruling Mongolian People's Revolutionary Party (MPRP)headquarters.
The emergency rule -- the first in Mongolia's history --means protests are banned and security forces can use tear gasand rubber bullets to break up demonstrations.
"At this moment, the situation in the capital city isrelatively normal. It is very peaceful compared to yesterday,but the troops need to stay in the street," the chief ofpolice, Amarbold, said on state television.
Justice Minister Monkh-Orgil said about 220 civilians and108 servicemen were injured in the clashes. Around 700protesters have been detained.
The outpouring of violence from a crowd of thousands hasleft an uneasy calm over the city, where armoured vehiclesmanned by troops took up positions.
Mongolia's election committee has yet to announce the finalresult of Sunday's vote, but preliminary results give the MPRP,which ruled the country as a Soviet satellite for much of thelast century, a clear majority in the 76-seat parliament.
The opposition Democratic Party said it did not accept theprojected outcome, but members also disavowed the violence andexpressed hopes of a meeting with the MPRP to resolve thesituation.
"From the Sea of Japan to the eastern border of Europe, weare the only functioning democracy and we have a duty to saveit," Democratic Party leader Tsakhiagiin Elbegdorj toldReuters.
Parliament was to convene an extraordinary session late onWednesday to formally approve the president's state ofemergency.
The uncertainty threatens to further delay deals that couldunlock vast reserves of copper, coal, uranium and otherresources beneath the country's vast steppes and deserts, seenas key to lifting the landlocked Central Asian state out ofpoverty.
TEETHING TROUBLES
Analysts and foreign business executives in Mongolia playeddown the violence, saying it was not supported by mostMongolians and describing it as teething troubles for a youngdemocracy.
"The outskirts of Ulan Bator have a lot of poor andfrustrated youngsters who would use any pretext to get tostreets and participate in any turmoil," said LuvsandendevSumati, from the independent Sant Maral Foundation.
Inflation, which reached 15.1 percent last year, is at itshighest level in decades and many residents expressedfrustration with unemployment and the rising cost of living.
Investors have pinned hopes on a majority government beingable to push through a long-awaited draft investment deal thatwould allow the Oyu Tolgoi copper and gold project to go ahead.
The agreement, which developers Ivanhoe Mines and Rio Tintosay could increase Mongolia's GDP by 34 percent, could clearthe way for future mining deals.
Foreign direct investment in Mongolia rose to $500 millionlast year (251 million pounds), some two-thirds of it directedat mining, according to the Asian Development Bank.
Foreign residents in the capital expressed hopes the riotwas an isolated case of post-election frustration and residentssaid they were shocked by the violence.
"What happened last night was really very wrong," saidUndrah, 24. "All of us feel that this was an act organised by afew people who were disappointed they could not get intoparliament."
At least one foreigner, a Japanese, was among those injuredin the riot, in which protesters threw stones, smashed windowsand torched the MPRP headquarters, the justice minister said.
Networks other than state television have been taken offthe air and a curfew is in place in areas of the capital.
The U.S. Embassy in Ulan Bator said it was "deeplyconcerned" and urged both parties to work together in a countryoften viewed as a rare example of democracy in Central Asia.
The Foreign Ministry in neighbour Russia called on allsides to show "restraint and responsibility".
Mongolia's election commission vowed to press on withcounting. International observers say overall the election wasfree and fair. But new election rules have led to proceduralproblems and some confusion over counting.
(Writing and additional reporting by Lindsay Beck and IanRansom; Editing by Benjamin Kang Lim and Alex Richardson)
