* Museveni facing biggest challenge yet
* Opposition leader pledges to fight corruption
* Rallies planned for capital Kampala
By Barry Malone
KAMPALA, Oct 25 (Reuters) - Uganda cleared on Monday four candidates including long-serving leader Yoweri Museveni for next February's presidentail poll seen as a test of democracy in a country about to start producing oil.
The election pits former rebel leader Museveni against his closest rival, Kizza Besigye, in the third face-off between the two. Besigye was Museveni's doctor in the bush when he was rebel leader.
"We want Uganda to become a modern country, to become a first world country," Museveni told reporters after receiving his nomination papers.
"We are (working) on the modernisation of agriculture and the industrialisation of the country."
One of Africa's longest serving leaders, the former cattle herder and student activist has been in power since 1986, during which time Uganda's economy --third largest in east Africa-- has expanded and the discovery of oil has boosted foreign investor interest.
Besigye is the leader of Inter-Party Cooperation (IPC), a coalition of four parties that some analysts say could be prone to splits before polling day.
Teams worked overnight plastering Kampala with election posters ahead of Monday's campaign kick-off. Both sides plan election rallies later in the day and riot police circled the site of the IPC event from early morning.
Thousands of supporters of the main parties lined the streets leading to a stadium where the nomination ceremony was held, shouting and waving posters.
"ORCHESTRATED VIOLENCE"
Besigye used the nomination ceremony to criticise Uganda's last two elections, promising to fight corruption and to invest in agriculture if he wins the vote.
"2001 was not free and fair, 2006 was not fair. It is a fact," he told reporters. "We did not lose. You do not lose elections under countrywide, orchestrated violence."
Seven candidates in total are expected to secure clearance on Monday and Tuesday but analysts say Besigye is the only one with an outside chance of beating Museveni.
The poll will be closely watched for signs of repression by Western donors and by foreign investors eyeing the fledgling oil industry -- both groups keen that stability prevails.
Museveni came to power as leader of a rebel group that overthrew a short-lived military junta and then introduced a "no party" model of democracy.
He became a darling of the West for what was seen as skillful and liberal management of the economy and he legalised political parties in 1995.
But support has fallen at home over the last decade and relations with the West have frayed over moves -- including scrapping terms limits for presidents -- that critics say signal the 66-year-old wants to be president-for-life.
Political analysts say Museveni, whose share of the vote has dwindled at each of the last three elections amid allegations of increased rigging, could face his stiffest challenge yet if the opposition coalition holds together. (Editing by Giles Elgood)
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