(Recasts, adds Kibaki quote)

By Wangui Kanina

NAIROBI, June 12 (Reuters) - The two main parties in Kenya's coalition government retained their parliamentary balance on Thursday in by-elections that avoided the violence which erupted after the two sides clashed over a December presidential poll.

President Mwai Kibaki's party won two seats while Prime Minster Raila Odinga's won three in the vote on Wednesday, the first test of political stability for the east African nation since a post-vote crisis killed 1,300 earlier this year.

The two former rivals for the presidency formed a coalition government in April to end an impasse over Kibaki's disputed re-election, and both have sought to keep the peace their union brought amid bickering over wounds the turmoil exposed. Their two parties hold a roughly equal number of assembly seats.

"I am confident that with the overwhelming support you mastered in the by-elections, you will be able to meet the expectations of your constituents", Kibaki said in a congratulatory statement to the five new legislators.

International observers were closely watching proceedings in the first voting in Kenya since Kibaki's re-election sparked deadly cycles of ethnic violence that also displaced 300,000 more and paralysed key sectors of the economy.

Wednesday's voting and the overnight tallying appeared to have gone smoothly, although armed police in riot gear with dogs patrolled polling stations in case of trouble.

"I am glad it was peaceful, it looks like Kenya may finally get back to normal ... and it seems this time the ECK (electoral commission) seems to have got its act together," said Grace Muchiri, an auditor.

The Kibaki-Odinga coalition has kept the peace and allowed Kenya's economy, the largest in east Africa, to begin recovering from the impact of a crisis expected to knock about three points off last year's growth figure of 7 percent.

Odinga's Orange Democratic Movement (ODM) clinched the three provincial seats of Ainamoi, Wajir North and Emuhaya.

Kibaki's Party of National Unity (PNU) won the Kilgoris seat near the Maasai Mara game reserve, and Nairobi's Embakasi constituency, formerly an ODM stronghold.

The by-elections were to fill seats where two ODM legislators were shot dead and another two constituencies that were undeclared in the chaotic aftermath of December's vote.

The fifth seat is that of Kenya's parliamentary speaker, who was obliged to resign from his constituency seat after getting the speaker's chair.

Another two ODM legislators -- Roads Minister Kipkalya Kones and Home Affairs Assistant Minister Lorna Laboso -- were killed in a plane crash on Tuesday. No plans have yet been announced to fill their seats.

Despite the relative peace in the coalition, rival party officials have bickered over issues like amnesty for crimes in the post-election period, and have also had embarrassing public tussles over protocol issues during rallies and ceremonies. (Additional reporting by Duncan Miriri; Editing by Bryson Hull Caroline Drees) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/)

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