(Adds analyst comment on prospect of a run-off, details)

By Ahmad Pathoni

DILI, April 8 (Reuters) - For tens of thousands of East Timorese who fled their homes last year when the tiny nation descended into chaos, the main hope from Monday's presidential election is that it will allow them to go home.

Outgoing President Xanana Gusmao has said East Timor's presidential poll is a chance to show his young nation is not a failed state.

But the shadow of violence remains.

Supporters of rival candidates clashed during campaigning last week, injuring more than 30 people and prompting international troops to fire tear gas and warning shots.

"I want to return home, but I'm still afraid," said Sofia Rofinus, a 38-year-old former teacher, who has lived in a tent with her five-year old daughter and husband for almost a year.

At the camp in the capital, children were flying kites in the scorching sun, their hair unkempt and clothes shabby, while older people sat outside their tents to escape the heat inside.

About 150,000 people were driven from their homes last year during violence that erupted after the government sacked 600 rebellious soldiers. Foreign troops were brought in to restore calm after dozens were killed.

Eight candidates are running in the election, including interim Prime Minister Jose Ramos-Horta, a Nobel peace prize winner who spearheaded an overseas campaign for independence from Indonesia. If no one wins more than half the votes, there will be a run-off, a scenario some analysts see as likely.

President Gusmao, an ally of Ramos-Horta, is not running for re-election but plans to seek the more hands-on post of prime minister in separate parliamentary elections later this year.

"We are ready for the elections. I believe this election will be free and fair," said Gusmao after a ceremony to hand over ballot boxes to officials in Dili, which was calm on Sunday as many went to Easter mass in the predominantly Catholic nation.

FOREIGN TROOPS AND OBSERVERS

Gusmao has blamed election clashes on the Fretilin Party of ousted Prime Minister Mari Alkatiri, accusing its leaders of allowing supporters to provoke violence.

Fretilin's candidate, Francisco Guterres, is another front-runner vying for support from just over half a million voters.

Julio Thomas of the National University of Timor Leste said a first round winner was unlikely given the number of candidates, voters and campaign turnouts.

He sees the poll as a three-way race between Ramos-Horta, Guterres and Fernando de Araujo of the Democratic Party who has backing from many younger voters.

A U.N. official said organising a free and peaceful election was not an easy task for a fledgling nation ravaged by conflict. Previous votes have been organised by international agencies.

Many hope the winner will unite a nation beset by regional rivalry, rebellious security forces and disillusionment five years after the joyous celebrations of independence.

Around 3,000 international troops and police will go on patrol to safeguard the elections, while about 200 international observers are monitoring the voting.

East Timor's vote for independence from Indonesia in 1999 triggered a campaign of violence by pro-Jakarta militiamen, leaving about 1,000 dead and a trail of destruction.

The United Nations ran the country until 2002.

Despite considerable oil reserves, the former Portuguese colony has the lowest per-capita gross domestic product in the world at only $400, according to the United Nations.

At the Don Bosco refugee camp, Rofinus, the displaced teacher, said food was scarce and people often had to make do with eating boiled papaya leaves and corn, instead of rice.

About 8,000 refugees remain at the camp in a school complex, from 16,000 at the height of the violence. More than 30,000 people live in several camps throughout the city.

"The government said if we still refuse to return, they won't give us food," Rofinus said. "But we're not asking for food. We want security."

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