(Adds reports of deaths in fighting near Slaviansk, paragraphs 2 and 21)
* Prime minister sees vote as triumph, binding Ukraine to West
* Putin says will "respect" will of Ukrainian people
* Sunday's voting in east may be limited by pro-Russia revolt
* "Chocolate king" leads polls, may win outright in first round
By Alastair Macdonald and Sabina Zawadzki
KIEV/DONETSK, May 24 (Reuters) - Vladimir Putin promised that Russia would work with the new Ukrainian administration formed after a presidential election on Sunday that the Kiev government said on Saturday would anchor the ex-Soviet state to the West.
In the eastern region where at least 20 people were killed in recent days, there was less violence, though in fighting near Slaviansk between pro-Moscow rebels and Ukrainian paratroopers, unconfirmed local media reports spoke of up to four deaths.
The separatists reject an election run by a fascist "junta" in Kiev and national electoral officials said few ballot papers had yet been issued in two eastern regions with over 12 percent of the electorate, implying most there will be denied a vote.
Denouncing an "atmosphere of terror" directed against local electoral officials in the east, Europe's OSCE democracy agency pulled out most of the dozens of international monitors it had posted to Donetsk region out of fears for their security.
Polls point to a resounding win for a pro-Western candidate and a heavy turnout elsewhere in the country of 45 million.
President Putin's verbal olive branch after months of East-West feuding and his annexation of Crimea, came at an economic forum where, having earlier acknowledged U.S. and EU sanctions were hurting the Russian economy, he played down talk of a new Cold War and denied a desire to rebuild Moscow's Soviet empire.
Though he renewed criticism of Western powers for backing what he called a coup in February against the last elected president, his ally Viktor Yanukovich, Putin said: "We will respect the choice of the Ukrainian people and will be working with the authorities formed on the basis of this election."
Ukraine's government and its Western allies, however, view the actions of pro-Moscow militants in disrupting voting in the heavily populated, Russian-speaking east as supported by the Kremlin to deny the new president legitimacy and give Russia perpetual leverage to exert its influence over its neighbour.
Putin again protested Russia's innocence and its desire to see Ukraine stable after months of worsening national divisions.
His assurances were welcomed by the leaders of France and Germany who spoke to Putin in a three-way telephone call that underlined the importance of Ukraine and Russia to a European Union that holds elections to its own EU parliament on Sunday.
A statement from the office of French President Francois Hollande in Paris said he and German Chancellor Angela Merkel had "taken note" of Putin's comments on working with Kiev's new leaders and that all three backed a national dialogue with OSCE support to resolve the crisis and amend Ukraine's constitution.
The interim Kiev leadership, who held a pre-election prayer meeting with religious leaders on Saturday seeking divine aid for the country's recovery, have offered greater autonomy for the east. But they reject Moscow's call for a looser federation and its claims of discrimination against Russian speakers.
Polls point to a resounding victory for pro-Western allies of the interim government on a turnout expected to be high, even allowing for the absence of Crimea and two big eastern regions.
Billionaire businessman and former minister Petro Poroshenko could win outright by passing 50 percent in Sunday's first round. But with 20 other candidates he may be forced into a runoff with former premier Yulia Tymoshenko, a distant runner-up in polls.
Though both have been involved in a feuding political and business elite that has failed to break a cycle of epic-scale corruption and national impoverishment and disunity since the Soviet collapse 23 years ago, the leading candidates carry the hopes of many Ukrainians desperate for a fresh start after rising up against their leaders for the second time in a decade.
Prime Minister Arseny Yatseniuk said in a televised address urging people to take their responsibility to vote and show "we cannot be intimidated" that the new president would make a first foreign visit to Brussels. There they would sign a free trade deal with the EU, whose rejection by Yanukovich in November triggered protests in Kiev that ended when he fled to Russia:
"The newly elected president will receive from the Ukrainian people a mandate for a determined and unstoppable movement away from the grey zone of lawlessness and dark forces that dream of suffocating us, and into an area of free people rallied around common values - to a place where it is easier to breathe."
Many Ukrainians, especially in the east, where businesses trade with Russia and fear competition from the EU, are wary of opening up the economy. Millions, however, and not only in more nationalistic, Ukrainian-speaking areas in the west, are keen on the prospect of travelling freely in Europe without a visa.
Yatseniuk assured those in the east whose ability to vote, he said, was being infringed by "the war against Ukraine" that they would soon be free of "bandits". Tensions among rival armed forces continue to run high, however, and government forces, long starved of resources, show little capacity to take charge.
Ukrainian government officials said their forces fought off attempts by militants to break an encirclement of the rebel-held city of Slaviansk, in the north of Donetsk region, on Saturday. Reuters journalists watched rebels and paratroopers exchange mortar fire for nearly two hours in the afternoon.
Interfax-Ukraine news agency quoted separatists saying that two media workers had been killed and a pro-Kiev blogger saying that two Ukrainian soldiers died. The reports could not be confirmed. On Thursday, 17 Ukrainian troops were killed in an ambush and on Friday at least two pro-Kiev militiamen died.
Keeping up a war of words with Moscow against a background of Russian and NATO buildups around Ukraine's borders, the Ukrainian foreign ministry issued a statement on Saturday saying border guards had seized armed men in several vehicles trying to cross the frontier from Russia illegally overnight.
"The penetration onto Ukrainian territory of armed terrorist groups, organised by the Russian authorities, is nothing other than the latest act of aggression against our state," it said.
Away from the restive east, Ukraine's defence ministry said an anti-aircraft battery facing Crimea fired warning shots at two Russian helicopter gunships approaching the mainland.
"ATMOSPHERE OF TERROR"
A civic group that supports the holding of elections said the head of a local polling station on the outskirts of the city of Donetsk was briefly kidnapped by armed men. And other electoral officials spoke of their fear of running the ballot.
"There's an atmosphere of terror," an OSCE source said of conditions facing Donetsk officials from opponents of the poll. "We've found many officials sending us terrified SMSs."
Most of the dozens of foreigners due to monitor voting across Donetsk region were being pulled out, he said. Ukrainian officials said many polling stations in Donetsk and Luhansk regions would not open and that ballot papers had yet to be distributed for fear of militants trying to seize them.
The regions account for over a tenth of the electorate.
Nationwide, over 1,000 OSCE observers will check polling stations and counts. Voting will run for 12 hours until 8 p.m. (1700 GMT). Exit polls will give a rapid indication of the result, but a definitive outcome will only be known on Monday.
Holding the election would itself be a national victory, Prime Minister Yatseniuk said. "Remember, tomorrow, with our ballot papers, we will be defending Ukraine, investing in its prosperity and in the future of our children and grandchildren.
"We will vote, and that means we will triumph."
In Donetsk, capital of the Russian-speaking industrial Donbass area, people are deeply divided, with many keen to vote and remain in Ukraine and others hoping that a makeshift referendum held by rebels two weeks ago will let them follow Crimea into union with the much wealthier Russia.
Calling the Kiev authorities "worse than the Nazis", a pensioner who gave his name as Dmitry said outside the rebel-occupied regional administration building: "We are living under occupation ... Of course I'm not going to vote."
But nearby, 74-year-old Anatoly was equally contemptuous of those who have turned the building into the headquarters of their self-proclaimed People's Republic of Donetsk. Glaring at the barricades and rebel flags, he said:
"This is all nonsense, absolute nonsense. I'm against all of this - I can't believe they are acting against the Ukrainian state. They are Ukrainian fascists."
Saying he would not be able to cast a ballot, he added: "I have a right to vote. But they have taken away my right."
In the port of Mariupol, in the south of Donetsk region, a local electoral official, Viktor Kovba, said at least 10 of the city's 100 stations would not open and more might be affected.
"There's a risk the election will be disrupted. It wouldn't take much," he said. "If they target three stations, the whole city will know immediately and people won't go to vote."
An official at one polling station, who gave her name as Viktoria, was frank. She said: "People are afraid." (Additional reporting by Gabriela Baczynska in Mariupol and Paul Ingrassia and Alexei Anishchuk in St. Petersburg; Writing by Alastair Macdonald; editing by Gunna Dickson)