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UPDATE 1-TV star urges protests as his lead shrinks in dramatic Honduras vote

(Updates with latest election results from Wednesday morning)

TEGUCIGALPA, Nov 29 (Reuters) - The result of Honduras' presidential election was in limbo on Wednesday, with a gregarious TV host's surprise lead narrowing sharply, prompting him to call on supporters to take to the streets of the capital to defend the vote.

President Juan Orlando Hernandez, who won U.S. praise for helping tackle the flow of migrants and extraditing drug cartel leaders to the United States for prosecution, was favored to win Sunday's vote in the country, a poor Central American nation with one of the world's highest murder rates.

However, a delayed, partial count on Monday morning pointed toward an unexpected victory for TV entertainer Salvador Nasralla, 64. Inexplicably, election authorities then stopped giving results for more than 24 hours.

When, under mounting criticism from international election monitors over a lack of transparency, the electoral tribunal began updating its website again, the direction of the vote rapidly began to change.

By 7:30 a.m. local time (1330 GMT) on Wednesday morning, Nasralla's five percentage point lead of Monday, with 57 percent of the ballots counted, had thinned to less than one point, with about 75 percent of ballots counted, according to the election tribunal.

In a television interview on Tuesday evening, an angry Nasralla said the election was being stolen from him and asked his supporters to flock to the capital, Tegucigalpa, to protest.

"We've already won the election," he said. "I'm not going to tolerate this, and as there are no reliable institutions in Honduras to defend us, tomorrow the Honduran people need to defend the vote on the streets."

Nasralla said in a later television interview on Tuesday night that the election tribunal was only counting ballots from regions where Hernandez, 49, had won, skewing the results and giving the false sense that the president was heading for victory. He asked the tribunal to include ballots from regions where he was strong.

DIFFICULT NEGOTIATIONS

Nasralla, a self-described centrist who leads a left-right coalition called the Opposition Alliance Against the Dictatorship, and Hernandez have each claimed victory.

On Tuesday, Hernandez said he had won and refused to concede, telling supporters they should wait for final results.

After Hernandez spoke, thousands of his blue-clad supporters gathered outside the presidential residence to celebrate his supposed victory.

"We won the election with Juan Orlando Hernandez, and we won't let them remove him from power," said housewife Maria Aguirre, who hailed from a rough neighborhood on the outskirts of Tegucigalpa.

The election tribunal's delay was due to difficult negotiations between Hernandez's National Party and Nasralla's alliance, according to two European diplomats who spoke on condition of anonymity, Reuters reported on Tuesday.

Behind closed doors, the parties were discussing immunity from prosecution for current officials and how to carve up positions in government, the diplomats said.

In an interview on Tuesday, however, Nasralla denied he was in talks with the National Party. He vowed to review whether to keep a base stationed with U.S. troops if he won the election but also promised to deepen security co-operation.

Hernandez's National Party appears set to retain control of Congress in the election, giving it the second-most important perch in the country.

With a booming voice and finely coiffed hair, Nasralla is one of the country's best known faces as the host of game shows that feature scantily clad women by his side.

He is backed by former President Manuel Zelaya, who was ousted in 2009 after he proposed a referendum on his re-election. The possible return to a position of influence for Zelaya, who ran a leftist government, risks fueling concern in Washington.

The United States has longstanding military ties to Honduras but few ideological allies among the current crop of Central American presidents.

Hernandez was credited with lowering the murder rate and boosting the economy, but he was also hurt by accusations of ties to illicit, drug-related financing that he denies.

His bid for a second term, which was made possible by a 2015 Supreme Court decision on term limits, divided opinion in the coffee-exporting nation of 9 million people. (Reporting by Gabriel Stargardter; Editing by Toby Chopra)