(Recasts with comment from outgoing president, international observers; adds byline)

By Hilary Burke

ASUNCION, April 18 (Reuters) - Paraguay's presidential candidates and its outgoing leader predicted an orderly election on Sunday, easing previous warnings of fraud and violence.

Front-runner Fernando Lugo rejected the idea that violence could break out on election day, and President Nicanor Duarte Frutos also struck a moderate tone on Friday after saying earlier in the week that foreign "agitators" backing Lugo might take up arms if their candidate lost.

"I don't believe in this possible violent scenario," Lugo told foreign correspondents at his campaign headquarters on Friday. "All of our elections have been peaceful, regardless of the results."

A former Roman Catholic bishop, Lugo heads a center-left coalition and leads polls with between 30 percent and 40 percent support in Paraguay, a landlocked South American country known for corruption and contraband.

He is in a close race with ruling Colorado Party candidate Blanca Ovelar -- the first woman to run for president of Paraguay -- and retired army Gen. Lino Oviedo of the rightist UNACE party.

Lugo aims to end the 61-year rule of the Colorado Party, which is the world's longest-serving political group still in power. The Colorado Party backed Gen. Alfredo Stroessner's 35-year dictatorship until helping to oust him in 1989.

Supporters of Lugo and Ovelar scuffled briefly in Asuncion on Thursday night.

"Many people see a change in Paraguay's political scene after 60 years as something apocalyptic. But our alliance wants to affirm that this will be a genuine, transparent transition ... peaceful, open to dialogue, serene and mature," Lugo said.

Duarte Frutos, who is backing his former education minister Ovelar, told reporters: "No one should stay at home out of fear. We are here to fully guarantee everyone's right to vote."

However, he also said the government cannot control individual actions. "I can't say for certain that there will be no disorder or abuses," the president said.

Many ordinary Paraguayans fear the Colorado Party could buy votes or bribe election officials to remain in power, as it has been accused of doing in the past.

Whoever wins the most votes on Sunday will be the president and there will be no second round of balloting.

Regarding the possibility of fraud, Lugo said: "There are doubts and distrust ... . This is an issue that is on the front pages and is hanging in the atmosphere."

The head of the Organization of American States' election monitoring team said people were understandably nervous.

"Having one party in government for more than 60 years creates concern and unease among many people, because this is perhaps the first time that parties could possibly alternate in power," OAS mission chief Maria Emma Mejia told reporters. (Additional reporting by Mariel Cristaldo, Antonio de la Jara, and Daniela Desantis; editing by Fiona Ortiz and Mohammad Zargham)

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