By Bappa Majumdar

JANAKPUR, Nepal, April 10 (Reuters) - It had been one of Nepal's biggest troublespots, but the people of the country's southern plains ignored a boycott call by armed rebels and turned out in large numbers to vote on Thursday.

Their enthusiasm for a democratic solution to their problems gives new hope for peace in the Terai or Madhesh, Nepal's agricultural and industrial heartland bordering India, home to half the country's 26.4 million people, political analysts said.

"Madhesh today has given Kathmandu a chance to reform its institutions, devolve power and change its mindset," said Prashant Jha, a leading columnist on the region.

"It is a slap on the faces of the Madhesh rebels."

Political parties in the Terai are demanding autonomy for the region and its mainly Madheshi people, and there has been regular violence and many protests over the past year.

The Madheshi people are closely linked in language, dress and culture to neighbouring India and complain of discrimination by successive governments dominated by Nepal's hill people.

Just a few weeks ago, there were widespread fears the elections would not even take place in the region, but a last-minute deal brought most of the political parties in the area on board with a promise of autonomy after the vote.

Only armed rebels and radical parties are holding out, saying they do not trust a new government to keep its pledge.

An independent candidate was shot dead and another person died in a clash between rival party workers on Thursday, but the vote passed off much more peacefully than most had hoped.

"We have been terrorised by political parties and had locked ourselves in homes for weeks," Shankar Prasad, a grocery shop owner said, queueing to vote in the town of Janakpur.

"Blood and bullets will eventually give way to peace and flowers," he said, a marigold garland around his neck.

Activists burnt tyres and waved black flags to try to enforce a boycott but were largely ignored and later gave up entirely.

Hundreds of people prayed for peace in an ancient Hindu temple in Janakpur after casting their votes. Others danced to popular Nepali songs on the radio outside polling booths.

But the vote will not solve anything on its own. Not only does the new government have to reverse decades of discrimination against the Madheshis, people here say, it will have to rescue the region's ailing economy and create jobs.

"Guns and bullets will never solve the problem of the Madheshis," said Shashi Dhungana, a young housewife. "I hope the new government does something or the younger generation will all pick up guns."

Thursday's election is the centrepiece of a 2006 peace deal with Maoist guerrillas to end a decade-long civil war. It is supposed to yield a 601-member assembly which will write a new constitution and abolish the monarchy.

Leaders of a radical faction of the Madheshi People's Rights' Forum were fuming after failing to stop voters.

"They will come back to us when they find out they have been tricked," said Shubh Chandra Singh, local leader of the faction. (Editing by Simon Denyer and Krittivas Mukherjee)

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