* South must hold fresh, free elections
* Must embrace democracy to succeed
* Expectant southerners face disappointment
By Opheera McDoom
KHARTOUM, Jan 8 (Reuters) - South Sudan must embrace democracy if it wants to succeed as a new nation after Sunday's referendum on independence, former U.S. President Jimmy Carter said on Saturday.
Southerners will face disillusionment as the euphoria of independence dies down and the harsh realities of building a state from scratch sink in, Carter, head of the referendum's largest international observer mission, told Reuters.
"I don't think the (south-south) reconciliation process can continue unless there's a strong move in the south towards democracy," Carter said on the eve of the vote.
"That would require a consummation of the promises made for a new constitution and then for honest and fair elections in the best framework for democratic principles."
South Sudan President Salva Kiir has reached out to southern opposition parties and offered amnesties to militia leaders, most of whom have accepted. But Carter said fresh polls must be better than the flawed April elections to preserve peace.
"If there is a move towards autocracy, domination, deprivation of human rights -- that would be a catastrophe," he said.
Ecstatic southerners are celebrating what they see as the last step on a road to freedom after decades of north-south civil war ended in a 2005 peace deal.
"The south has high expectations which are not going to all be realised ... almost immediate economic prosperity, education and healthcare ... so there will be a great disillusionment," Carter said.
After months of aggressive rhetoric and provocative north-south violence, Carter said it appeared that Sudanese President Omar Hassan al-Bashir had decided to accept the inevitable secession.
"The north has accepted it reluctantly but quietly as an alternative to conflict and war."
But Carter, who has been visiting Sudan for almost 25 years, said he was surprised at the strength of public opinion towards secession in the south.
He said the loss of former southern rebel leader John Garang who died in a helicopter crash three weeks after taking office as the country's vice president, coupled with the failure of the north to share its resources pushed southerners to separation.
"Had things gone differently with John Garang staying in power and an adequate sharing of national wealth, the south might be faced with a very close vote on independence."
He said the Carter Center had almost 100 staff working to observe the vote, starting on Jan. 9. (Editing by Janet Lawrence)