* Election unlikely to settle eight-year crisis
* Yingluck to remain caretaker PM, protests continue
* Protest leader commends ballot saboteurs
* Vote disrupted in one-fifth of constituencies
* PM says election a "positive signal" (Releads, adds new details throughout)
By Martin Petty and Amy Sawitta Lefevre
BANGKOK, Feb 2 (Reuters) - Elections in Thailand passed off peacefully on Sunday but the country was no nearer to ending its intractable political conflict, with the government facing the prospect of months of paralysis, protests and complex legal challenges.
Voting was disrupted in about a fifth of the country's constituencies, but no major violence was reported, despite armed clashes between supporters and opponents of embattled Prime Minister Yingluck Shinawatra that wounded seven people on the eve of the ballot.
Voting ended at 3 p.m. (0800 GMT), but no results will be announced on Sunday, meaning little change to an uneasy status quo. Yingluck will remain caretaker premier for weeks, facing continued anti-government protests and the prospect of a slew of legal challenges aimed at invalidating the poll.
The usual campaign billboards, glossy posters and pre-election buzz were noticeably absent this time, as were many voters fearful of violence or bent on rejecting a ballot bound to re-elect the political juggernaut controlled by Yingluck's billionaire brother, Thaksin Shinawatra.
Former premier Thaksin, 64, is loved and loathed, but his parties have won every poll since 2001. His opponents say he is a corrupt crony capitalist who tailored policy to enrich himself and ruling by proxy from exile in Dubai, where he lives to evade jail time for graft.
Further voting is already scheduled for Feb. 23 after problems with advance balloting last Sunday, while polls in nine southern provinces where candidates were unable to register may not happen for weeks.
"To those of you who went out and prevented ballot boxes from being delivered, thank you," protest leader Suthep Thaugsuban said in a speech at one of seven rally sites in Bangkok, where anti-Thaksin sentiment is strong.
Voting was disrupted in 18 percent or 69 of 375 constituencies nationwide, the Election Commission said, affecting 18 of 77 provinces, where demonstrators calling for an appointed government succeeded in sabotaging the vote.
With the main opposition Democrat Party boycotting the poll, Yingluck's Puea Thai Party is expected to win comfortably.
Its leader said the election showed the public believed in democracy.
"The people are not afraid and they came out to vote today," said Jarupong Ruangsuawan, who is also Interior Minister. "We've fought hard for democracy in Thailand and we proved that most Thais believe in the democratic process."
Even if the result were known, victory celebrations for Yingluck would probably be muted. With many parliamentary seats unfilled, she could be exposed to legal attacks, intensified protests and unable to pass bills and budgets crucial to reviving the economy, Southeast Asia's second-biggest.
Anti-government demonstrators say Thaksin subverted Thailand's fragile democracy by entrenching money politics and using taxpayers' money for generous subsidies, cheap healthcare and easy loans that have bought him loyalty from millions of working-class Thai voters in the north and northeast.
With broad support from Bangkok's middle class and tacit backing of the royalist establishment, old-money elite and military, the protesters want to suspend democracy, replacing it with an appointed "people's council" to reform politics and erode Thaksin's influence.
The latest round of tumult in the eight-year political conflict erupted in November and underscored Thaksin's central role in the long-running struggle, both as hero and villain.
Yingluck was largely tolerated by Thaksin's opponents but her party miscalculated when it tried to introduce a blanket political amnesty that would have nullified Thaksin's graft conviction and allowed him to return home.
Many Thais see history repeating itself after a cycle of elections, protests and military or judicial interventions that have polarised the country and angered Thaksin's "red shirt" supporters, who staged crippling blockades in Bangkok in 2010 and have vowed to defend his sister from any overthrow attempt.
Thailand's military has remained neutral so far, but the judiciary has taken on an unusually large number of cases in the past two months in response to complaints against Yingluck and Puea Thai that could result in the party's dissolution and lengthy bans for its top politicians.
There is also a chance the election could be annulled, as it was in 2006, over a technicality. The Election Commission is braced for a deluge of complaints and challenges.
Even if Yingluck wins a fresh mandate, analysts say opposition against her remains entrenched and continued stalemate is almost certain. Yingluck said she hoped the various camps could find a way to break the deadlock.
"This election is part of the democratic process," she told reporters. "I hope all sides can help solve each of the country's problems. Overall, today was a positive signal." (Additional reporting by Alisa Tang, Amy Sawitta Lefevre, Panarat Thepgumpanat and Pairat Temphairojana; Editing by Alan Raybould & Kim Coghill)