Paraguay's leftist president faces impeachment

* Leaders of congressional impeachment confident

* Gov't seeks to halt trial with Supreme Court filing

* South American governments send envoys to Paraguay (Adds comments by Rousseff and Hillary Clinton)

By Daniela Desantis

ASUNCION, June 22 (Reuters) - Paraguay's Senate will decide whether to oust President Fernando Lugo in a lightning-quick impeachment trial on Friday that he says is tantamount to a coup.

Lugo, a silver-haired former Roman Catholic bishop who quit the Church to run for the presidency, is accused of mishandling armed clashes over a land eviction in which 17 police and peasant farmers were killed last week.

His rivals, who firmly control both congressional houses, were confident they would get the votes needed to remove the president. Lawmakers in the lower house agreed in a sudden, near-unanimous vote on Thursday to start the impeachment.

The Senate is set to vote at 4:30 p.m. (2030 GMT) on whether to oust Lugo less than a year before his term is due to end.

"This is an 'express' coup because (lawmakers) have done it in the wee hours of the night," Lugo told television station Telesur late on Thursday.

He has refused to resign, resisting pressure from Church leaders to step down to ease mounting tension, and his defense team asked the Supreme Court to intervene on the grounds that the impeachment violates the constitution.

If convicted on Friday on the charge of failing to fulfill his duties by allowing social conflicts to escalate, Lugo would have to leave office. Under Paraguay's constitution, an impeached leader is replaced by the vice president, who completes the term. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ FACTBOX-Paraguay's bishop-turned-president FEATURE-Armed leftists test Paraguay's Lugo ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

According to the rules set out by the Senate a day earlier, Lugo's defense team was given two hours to outline its case.

"The president has been given fewer guarantees and fewer rights to defend himself than someone with a traffic fine," said one of Lugo's lawyers, Adolfo Ferreiro. "They seem to think anything can be justified in the name of politics."

Lugo's rivals said they expected to get the two-thirds support needed to remove him from office and they defended the legality of the process.

"There's nothing illegal here, there's no constitutional rupture, no coup," said center-right lawmaker Carlos Maria Soler. "There should be enough votes."

PRO-LUGO FORCES GATHER

In the downtown square facing the Congress building, several thousand people gathered as Lugo's lawyers outlined his defense, m o st of them peasant farmers and leftist activists carrying banners with pro-Lugo slogans and waving the red, white and blue national flag.

"We're going to defend our president because we're the ones who chose him," said Amelino Benitez, 18. "We won't allow them to steal the only power that we have - our vote."

Extra police were sent into the streets of the capital, Asuncion, where most businesses were shuttered and rush-hour traffic was unusually light.

Lugo, 61, a mild-mannered leftist who speaks the Guarani Indian language, vowed to champion the needs of poor Paraguayans when he was elected four years ago, ending six decades of rule by the Colorado party.

His election raised expectations among his supporters that he would tackle rampant corruption and gaping income inequalities in the soy-exporting nation of 6 million people.

Paraguay has been plagued by political instability and is known regionally for its marijuana crops and as a hub for smuggling and money laundering.

Lugo has struggled, however, to carry out his reform agenda, including his promise to redistribute land to peasant farmers, due to the opposition's tight grip on Congress.

A cancer scare and several paternity scandals have also clouded his presidency.

CONCERN IN REGION

The next presidential election is in 2013 and Lugo's vice president, Federico Franco, who has been a fierce critic of Lugo, had been expected to run for office.

It was not clear whether Franco would be able to run next year if he assumes the presidency now because the constitution limits leaders to a single term.

Re-election has been banned since the constitution was overhauled following the 1989 fall of General Alfredo Stroessner's brutal 35-year dictatorship.

Some critics accuse Lugo of sympathizing with the peasant farmers who ambushed police officers last week when they went to enforce an eviction order on a farm in the rural northeast.

Legislators also accuse Lugo of having backed a meeting of young Socialists at a site owned by the armed forces and of acting meekly to fight a small, violent left-wing group called the Paraguayan People's Army, known by its Spanish initials EPP.

The impeachment trial has raised concern among South American governments, which dispatched their foreign ministers to Asuncion late on Thursday.

Ecuadorean President Rafael Correa warned that the UNASUR regional group could refuse to recognize the new government if the Senate removed Lugo, "or even close borders."

The ALBA bloc of left-wing Latin American leaders branded the impeachment trial "a maneuver by right-wing politicians," while the 35-member Organization of American States held a special meeting to discuss the crisis.

U.S. Secretary of State Hillary Clinton said Washington was following the situation closely and President Dilma Rousseff of neighboring Brazil said that "a negotiated solution is important." (Additional reporting by Didier Cristaldo in Asuncion, Lauren French and Andrew Quinn in Washington and Hugo Bachega in Rio de Janeiro; Writing by Helen Popper; Editing by Peter Cooney)