* Age-old ethnic divisions deepen since 2010 election
* Instability a threat to Africa' fragile ``coup belt''
* Mining investment slowing in world's top bauxite exporter
CONAKRY, Oct 23 (Reuters) - Two years ago, Guinea's first freely-elected president Alpha Conde promised to unite ``every son'' of his nation; today the man with ambitions to become West Africa's Nelson Mandela is struggling to halt a wave of ethnic unrest.
Tribal violence in the world's biggest bauxite exporter is threatening to delay parliamentary elections, scare off foreign investors and deepen strains in neighbouring countries across Africa's fragile ``coup belt''.
Rights groups and political analysts say Conde, 74, has fallen far short of his promise to unite Guinea in the way that Mandela united South Africa after apartheid. Some even say he has inflamed ethnic hatred as much as the opposition, an accusation which the government denies.
``Conde inherited a difficult situation with virtually no institutions and a decaying state,'' said Lydie Boka of risk consultancy StrategiCo. ``But he knew that having the number one job was a tall order, so now he should deliver.''
``He also knew he would be accused of tribalism but he has not done much to prove the contrary,'' she said.
Conde made his promise in 2010 when he narrowly won a presidential election held under Guinea's transition to civilian rule following a coup d'etat two years earlier.
However, ethnic riots have exploded across the ramshackle capital of Conakry in recent months, most recently in September when youths from Guinea's two largest ethnic groups, the Malinke and Peul, fought each other with rocks, clubs and machetes.
``It was chaos here,'' said Adama Mara, a 35-year-old mechanic in Conakry. ``The Malinke were targeted in Peul neighbourhoods, and the Peul were targeted in Malinke neighbourhoods.''
Security crackdowns, including the use of tear gas in the home of an opposition leader in August, have drawn criticism from the United Nations and human rights groups.
Investors have also got cold feet over billions of dollars' worth of resource projects due to the political tensions, a mining contract review, and falling iron and aluminum prices.
Fears are growing that the turmoil will further delay the parliamentary elections that foreign donors say must be held before they can resume aid payments halted after the 2008 coup. These polls have already been postponed to this year from 2011, and diplomats doubt they can be held even in early 2013, regardless of whether the government and opposition cooperate on the arrangements - and accept the outcome.
``Even if suddenly both sides were able to get together and agree on things, it would be impossible to organise an election before next spring,'' one diplomatic source said, asking not to be named. ``But the real worry is that the result will be contested and will drive the country even further apart.''
Guinea lies at the heart of Africa's ``coup belt''. Neighbouring Mali has slid into chaos this year after a coup and an Islamist rebellion in its northern desert. Other neighbours, Ivory Coast, Sierra Leone and Liberia are struggling to recover from civil wars and would be hard pressed to handle the knock-on effects of any ethnic crisis in Guinea.
Like in many parts of Africa, politics in Guinea are traditionally drawn along ethnic lines.
Conde's ruling party is largely supported by Malinke, who make up 35 percent of the population and the bulk of the army. The opposition led by Cellou Dalein Diallo is mostly backed by Peul, descendants of migrant Muslim herders who are Guinea's largest ethnic group at about 40 percent.
Conflict between the two groups, mostly over land, dates back centuries but tensions have repeatedly flared since Guinea became independent from France in 1958.
Guinea's first post-independence president, Ahmed Sekou Toure, ran an authoritarian regime for nearly three decades that promoted Malinke to top government posts.
In 2009, security forces killed more than 150 people who protested in Conakry against the then military junta and raped scores of women, with rights groups citing evidence that the soldiers had targeted Peul.
Conde's government has won international praise, including from France, for starting to reform the undisciplined army, seeking to prosecute soldiers who committed rights violations, and for guiding Guinea to more than $2 billion worth of debt relief under an IMF and World Bank programme.
But demonstrations about the election preparations have often turned violent, provoking heavy-handed crackdowns by security forces on the mostly Peul protesters, or street clashes usually between Peul and Malinke.
Mamady Kaba, an official at the Guinean human rights group RADDHO, said both Conde and his rivals appear to be fanning the flames for political advantage.
``They play on people's fears, they encourage ethnic hatred and exacerbate frustrations in order to get an electoral base. They do it even though they are aware that there is no future in this kind of division,'' he said.
Conde's government denies this. ``The political sphere is no place for ethnic questions that can bring us to a standstill,'' said spokesman Damantang Albert Camara.
The government has aimed to set up a truth and reconciliation commission like in post-apartheid South Africa. ``This commission can certainly not draw any conclusions prior to the legislative elections, but its work could help to ease ethnic tensions while permitting us to concentrate on the challenge of development,'' he added.
Conde spent more than 50 years as an opposition activist and leader, first fighting for independence and later criticising presidents Sekou Toure and General Lansana Conte, who died of an illness shortly before junior officers seized power in 2008.
During those years he faced exile - working at one time as a university professor at the Paris Sorbonne - imprisonment, and a death sentence in absentia for his opposition.
Conde has accused the opposition of demonstrating violently and seeking to block progress in the country. ``Never during my years of opposition did I throw a stone or attack anyone,'' he said in a speech earlier this month.
``I guarantee you that the Guinean elections will pass in transparency and that they will be free, transparent and democratic,'' he said. ``Make no mistake, the train is leaving the station, the train of legislative elections. Those who get on board will come along. Those who do not will be left on the platform. No one will stop Guinea's forward progress.''
RICH OF LAND, POOR OF PEOPLE
Along with bauxite, the raw material in aluminium, Guinea has iron ore deposits that have drawn billions of dollars in planned investments by mining companies such as Anglo-Australian Rio Tinto and Vale of Brazil.
But the wealth has not trickled down to ordinary citizens. Most still live on less than $1 a day, and many lack access to clean water, education, health care and electricity.
In a sign of growing frustration, scores of youths from the remote village of Zogota attacked a nearby iron ore project run by Vale and BSGR in July, causing millions of dollars in damage and forcing the evacuation of staff.
Security forces killed at least five villagers in a midnight raid a few days later in apparent retribution that local people said was ethnically motivated, leading Conde to order an investigation and sack the regional prefect.
The tensions have raised worries that the military, which has a long history of political meddling and has staged two successful coups, could intervene again. Last year Conde escaped unharmed when soldiers attacked his residence.
Since then, Conde has been negotiating a sensitive army reform effort that - so far - has included the forced retirement of about 4,000 soldiers alongside careful appointments of allies from various ethnic groups to top military posts.
Corinne Dufka, a senior researcher for Human Rights Watch, said that while Conde had failed to live up to his early promises to unite the country, he had succeeded in mostly keeping the army in the barracks during the recent protests.
``The police and gendarmes have been handling the street protests for the most part. There has been a lot of tear gas in the air as well as some bullets,'' she said. ``But in the past it might have been more bullets and less tear gas.''
A senior military official said worries of army meddling were exaggerated but warned Conde against trying to stack the military with his allies. ``The truth is that it is not possible to play favourites with your clan in the army without the risk it will backfire,'' he said, asking not to be named.
Vincent Foucher, an analyst for risk consultancy International Crisis Group, said Guinea's legislative polls were an important test that could take the country closer to progress - or provoke a slide into the ethnic chaos of the past.
``If the elections are not organised with a genuine discussion between the government and the opposition, there is a risk of an increase in incidents like ethnic clashes, and that could become contagious,'' he said.