(Corrects party name in second paragraph)
* Fresh violence on eve of poll could keep voters away
* Opposition leader says she is under virtual house arrest
* Prime minister offers prospect of post-election talks about future polls
By Ruma Paul and Tony Munroe
DHAKA, Jan 4 (Reuters) - Bangladesh was hit by renewed violence, with two more people killed on the eve of elections on Sunday in which the ruling Awami League looks certain to prevail in a walkover as the main opposition party boycotts the poll.
The Bangladesh Nationalist Party (BNP) called a 48-hour strike from Saturday morning, on top of a transportation blockade, and urged voters to stay away from the "farcical" election.
Without the BNP's participation, only 146 of 300 parliamentary constituencies are being contested.
"I call upon countrymen to fully boycott the disgraceful farce in the name of election of January 5," BNP chief Begum Khaleda Zia, who has been under what she calls virtual house arrest, said in a statement late on Friday. The government has denied that she is confined or under house arrest.
The BNP is protesting against Prime Minister Sheikh Hasina's scrapping of the practice of having a caretaker government oversee elections and many of its leaders are in jail or in hiding. The impasse undermines the poll's legitimacy and is fuelling worries of economic gridlock and further violence in the impoverished South Asian nation of 160 million.
The office of prime minister has been held by Hasina or Khaleda for all but two of the past 22 years and the rivalry between them is bitter.
The European Union, a duty free market for nearly 60 percent of Bangladesh's garment exports, has refused to send election observers, as have the United States and the Commonwealth, a grouping of 53 mainly former British colonies.
A ruling party leader was shot dead in southwestern Khulna overnight and a party youth activist was killed in clashes with rival BNP supporters in northwestern Lalmonirhat, police said, as renewed violence flared after several days of relative calm.
Two buses were set on fire in the port city of Chittagong and more than a dozen polling stations had been torched by opposition activists since Friday.
At least 10 people were injured when BNP activists hurled bombs at a railway station and set on fire a train compartment in the northern town of Natore, police said.
With more than 100 people killed in the run-up to the election, mainly in rural districts, fears of violence at polling stations are expected to keep many voters away.
"The Bangladesh government should end its crackdown on the political opposition leaders and activists, and create conditions for free and fair elections," U.S.-based Human Rights Watch said in a statement.
"Opposition parties should condemn and end violence by their supporters."
Bangladesh's $22 billion garment industry, which accounts for 80 percent of exports, has been disrupted by transportation blockades ahead of the election.
The Awami League argues that the interim government system has failed in the past.
While black-and-white campaign posters - colour is not allowed - hung in parts of the capital, the main opposition's absence means the election has lacked the pomp and suspense of a fully competitive poll.
Hasina has spoken of holding talks with the opposition following the polls on the conduct of future elections. If successful, that could lead to another election.
The BNP demands a halt to the current electoral process.
In the event of a breakdown of law and order, the military could step in to take power, as it did in 2007, but is seen as reluctant to do so. (Additional reporting by Serajul Quadir; Editing by Ron Popeski)