UPDATE 4-Bolivia election audit set to begin with country caught in deadlock

(Adds comments from OAS secretary general)

By Vivian Sequera

LA PAZ, Oct 30 (Reuters) - The Organization of American States (OAS) will begin an audit this week of Bolivia's fiercely contested presidential vote, which sparked nationwide protests and allegations of fraud, but the opposition candidate raised serious doubts about it.

The OAS will start the audit on Thursday which would be "binding" for all parties, Bolivian Foreign Minister Diego Pary told reporters on Wednesday. The audit should have results well within two weeks, the OAS said.

The Oct. 20 election handed socialist President Evo Morales a first-round win with just above the 10-point lead needed to avoid a risky runoff against main rival Carlos Mesa.

Mesa, who had previously stated he believed the audit would demonstrate clear election fraud and pushed for it to be made binding, said on Wednesday however that he did not trust the audit "agreed between OAS and (Morales' party) MAS."

He said in a statement that his party "did not accept the audit under the current terms, agreed unilaterally."

The election furor erupted when the initial vote count was inexplicably disrupted, sparking the anger of opposition supporters, allegations of vote-rigging and concern from the OAS and foreign governments including the United States and Brazil.

Morales, who swept to power in 2006 as the country's first indigenous leader, has overseen almost 14 years of relative stability and reliable economic growth in one of Latin America's poorest nations.

Pary said Bolivia had invited observers from Spain, Mexico and Paraguay to monitor the audit process.

OAS secretary general Luis Almagro said on Twitter the audit would take between 10 to 12 days, including verification of the voting tables and ballots, the digital processes, statistical elements, and the chain of custody of electoral material.

Protests over the election have convulsed Bolivia, with police firing tear gas in the capital on Tuesday.

Political consultant Jorge Dulon said that with both sides refusing to back down, and the opposition seemingly not on board with the OAS audit, the country was deadlocked with no clear way to end the standoff.

"It's hard to see the way out of this crisis," he said.

Morales, a former coca farmers' union leader has faced a rising tide of dissatisfaction, however, even among the indigenous groups he has most visibly supported, with widespread anger about him seeking a contentious fourth term despite term limits.

Allegations of cronyism and lavish projects - including a $34 million, 28-floor presidential palace in La Paz - have created a sense of unease about him losing touch with the working people.

(Reporting by Vivian Sequera, writing by Aislinn Laing and Adam Jourdan; Editing by Alistair Bell)