By Linda Sieg

TOKYO, Dec 10 (Reuters) - Japan's ruling bloc is expected to extend a parliamentary session that ends this week to enact a law to resume a naval mission in support of U.S.-led operations in Afghanistan, setting the stage for a possible showdown with the opposition that could trigger a snap election early next year.

Parliament has been deadlocked over the naval mission and other key policies ever since the opposition Democratic Party and its smaller allies won control of parliament's upper house in July, enabling them to delay legislation.

But with both ruling and opposition camps wary of going to the polls too soon, some analysts say talk of an election for the powerful lower chamber as early as February is probably overdone.

Prime Minister Yasuo Fukuda has vowed to resume the mission to refuel U.S. and other ships patrolling the Indian Ocean, which Washington says is vital to the global war on terrorism. The activities were halted after an enabling law expired on Nov. 1.

"We want to make our utmost effort to enact it by the end of this parliamentary session," said Chief Cabinet Secretary Nobutaka Machimura. The session is set to end on Dec. 15.

But Machimura told a news conference that if this proved impossible, the ruling parties would decide in a day or two what steps to take and then inform the opposition camp.

Opposition parties are against the naval mission but have yet to clarify whether and when they will hold an upper house vote.

Fukuda's Liberal Democratic Party (LDP) and its junior partner, the New Komeito party, can override an upper house rejection with their two-thirds majority in the lower house.

But they can only do so after a vote has been taken in the upper chamber or after 60 days have passed from the time the lower house approved the legislation on Nov. 13.

NO GUARANTEES?

Analysts said the ruling bloc would rather extend parliament by just a couple of weeks so as not to delay work on the budget for the fiscal year that starts on April 1, but can only do so if the opposition promises to vote by year's end.

Such a deal would also probably mean the opposition had decided not to submit a rare censure motion against Fukuda in the upper house after the legislation is enacted.

A censure motion is not legally binding, but it could still put pressure on Fukuda to call an early election for the lower house.

The LDP-led ruling bloc is reluctant to risk its two-thirds majority in the lower house and would like to wait at least until after Japan hosts a Group of Eight summit in July, pundits say, while the Democrats aren't really ready for an election either.

But without a guarantee from the opposition, the ruling coalition will have to extend parliament into mid-January to ensure enough time to enact the naval mission legislation.

That would set the stage for a showdown that could lead to a lower house election as early as February or, as some say is more likely, in April or May after the 2008/09 budget is enacted.

"Neither side wants a February election scenario," said Hidenori Suezawa, a chief government bond strategist at Daiwa SMBC. "But if everything stalls in the next regular session of parliament, Fukuda may be forced to dissolve parliament next spring because he can't achieve anything." (Additional reporting by Teruaki Ueno)

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