* Kenyatta and Ruto face ICC trial over election violence
* March 4 vote the first since the bloody 2007 polls
* Ruling barring Kenyatta could have sparked tension
* PM Odinga says will respect court's decision (Adds Kenyatta quotes, petitioner to go to Supreme Court)
By James Macharia
NAIROBI, Feb 15 (Reuters) - Kenya's High Court on Friday cleared the way for Uhuru Kenyatta to run in next month's presidential election, dismissing arguments that his looming trial on charges of crimes against humanity made him ineligible.
Kenyatta, a former finance minister and the son of the country's founding president, is one of four accused at the International Criminal Court of orchestrating tribal fighting that killed 1,200 people after the last vote in 2007.
He is running a close second to Prime Minister Raila Odinga according to opinion polls ahead of the March 4 election.
If Kenyatta wins, his first foreign trip as president could be to appear in the dock at the court in the Hague at a hearing scheduled for April.
The Kenyan High Court also cleared the way for Kenyatta's running mate William Ruto to stand in the vote, as part of their Jubilee coalition. Ruto is also facing charges at the ICC over the 2007 violence. Both men deny the charges.
"I welcome the high court ruling today," Kenyatta said in a statement. "It has affirmed what we have always held; the people of Kenya - and they alone - have the power and the mandate to determine the leadership of this great country."
Odinga and Kenyatta head largely ethnic-based coalitions with few ideological differences, and there was concern about how Kenyatta's supporters might react if he had been barred.
Similar ethnic rivalries fed the fighting after the last vote five years ago which damaged the image of the east African country, the region's most powerful economy and a key ally in the U.S.-led war against militant Islam in the region.
The vote is predicted to be close, and if no candidate secures an absolute majority, a run-off will be conducted and Kenyatta is expected to be one of the two contenders.
Dismissing the case against Kenyatta, the Principal Judge of the High Court, Mbogholi Msagha, said it did not have jurisdiction over the petitions filed by various legal and rights groups, and added they should have asked the electoral commission to exclude Kenyatta and Ruto.
Msagha also said he could not deny Kenyatta and Ruto their right to contest the poll because they had not been convicted. "They are presumed innocent until proved otherwise," he said.
However, one of the groups seeking to block Kenyatta's bid said it would take the case to the Supreme Court.
"For sure, we are ready for Supreme Court engagement," said Ndung'u Wainaina, the executive director of the International Center for Policy and Conflict. "Uhuru Kenyatta is not free to seek and hold public or state office."
Odinga, who has repeatedly said he would rather face Kenyatta in the ballot and not have his rival blocked by the courts, said he respected the court's ruling.
TIGHT, TRIBAL RACE
The vote in March also includes parliamentary and regional elections in a country of 40 million people where tribal links still have a big influence on voters' political allegiances.
Issues such as the ICC or High Court cases do not usually sway the majority of voters' opinions, and Kenyatta's popularity soared among his tribe when he was indicted by the ICC in January last year.
However, several Western powers face a dilemma over what to do if Kenyatta wins the election, warning it cannot be business as usual when dealing with an ICC indictee.
Adams Oloo, a professor of political science at the University of Nairobi said Friday's verdict was not a surprise.
"We have come too far down the road in the race for the presidency to have a candidate struck out of the ballot paper by the stroke of a pen," said Oloo.
"That would cause serious polarisation of voters and in a way throw the country to the dogs. The big concern for Kenyatta still remains the ICC trial gnawing at the back of his mind."
Although Kenyatta and Ruto have both criticised the ICC prosecutor for bringing the cases against them, they have repeatedly said they will obey the war crimes court's summons in the hope that they would eventually have their names cleared.
They have rejected calls to stand down as candidates, saying Kenyans would elect who they wish. (Additional reporting by Humphrey Malalo; by Michael Holden)