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By Hasmik Mkrtchyan

YEREVAN, April 4 (Reuters) - Armenian President Robert Kocharyan on Wednesday appointed Serzh Sarksyan as the Caucasus nation's new prime minister and he is now expected by many to run for president in next year's election.

Sarksyan's name was put forward by the Republican Party, the biggest group in parliament, after consultations with other parties this week. The previous prime minister, Andranik Margaryan, died from a heart attack on March 25.

Sarksyan's cabinet will work until May 12 when Armenia, a nation of 3 million people, will elect a new parliament in a vote planned before Margaryan died.

He may be re-elected prime minister after the election in which the Republican Party, which holds a majority in parliament with its allies, is expected to perform well.

But many believe his ambitions extend beyond the post of prime minister since he has said he might run for president next year after Kocharyan's second -- and last -- five-year term in office expires.

The mood of many voters may be influenced by the fact that like Kocharyan, Sarksyan also comes from the Nagorno-Karabakh area which Christian Armenia annexed from Muslim Azerbaijan in a bloody conflict.

Kocharyan and Sarksyan held top posts in Karabakh during the war with Azerbaijan that claimed more than 35,000 lives before a 1994 truce. Sarksyan has been decorated with a top Armenian military order.

Armenia, bordered by Azerbaijan, Turkey, Georgia and Iran, relies heavily on financial and moral support from a huge diaspora in Russia, Western Europe and the United States.

Kocharyan relieved Sarksyan, acting leader of the Republican Party, of his other posts of defence minister and secretary of the president's security council which he had held since 2000.

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