By Lamine Chikhi
ALGIERS (Reuters) - Five months after a stroke put him in a Paris clinic under a cloud of succession rumors, Algerian President Abdelaziz Bouteflika is again exercising the political muscle that has kept him in power for more than a decade.
Since his return from France in July, Bouteflika has moved to outflank rivals in behind-the-scenes negotiations within the ruling FLN party-military alliance that wields real authority.
Far from fading into convalescence, analysts and experts say the veteran of Algeria's independence struggle appears to be extending his influence before 2014 elections with a series of maneuvers that strengthens the hand of his allies.
Political uncertainty in Algeria comes at a sensitive time elsewhere in North Africa, where Egypt, Tunisia and Libya are still struggling with instability after popular uprisings ousted their veteran autocratic leaders in 2011.
With a cushion of $200 billion in reserves from oil and gas sales, OPEC-member Algeria can turn to public spending to placate unrest. The opposition remains weak and there is little appetite for upheaval after the 1990s conflict with armed Islamists that killed around 200,000 people.
Yet Algeria's state-dominated economy remains plagued by red tape and corruption, while its ageing ruling elite has mostly conducted business in Soviet-style one-party secrecy and backroom deals since independence from France in 1962.
The latest internal struggle may decide whether Bouteflika steps aside, as many expect, for a loyalist or for a compromise candidate to run Algeria, Europe's top energy supplier and a U.S. partner in combating Islamist militants in the Maghreb.
Bouteflika has stayed largely out of the public eye since July. But a cabinet reshuffle two weeks ago kept his allies in vital posts, including Prime Minister Abdelmalek Sellal and Energy Minister Youcef Yousfi.
More significant, analysts and sources say, was a transfer to the army of some functions previously controlled by the intelligence service, known by its French initials DRS, whose director since 1990, Mohamed Mediene, has long played political kingmaker.
"Bouteflika wants to put an end to the DRS's political role," said director of Ennahar TV and analyst Anis Rahmani. "It is, in a way, the beginning of a major change in the Algerian political system."
Under the constitution, the elected president and parliament hold power, but many Algerians believe real authority lies with a murky group of senior party and security officials commonly known by the French word "le pouvoir" or "the power".
A shrewd political player even before independence, Bouteflika, 76, has considerable influence within "le pouvoir", say analysts, but he must cooperate with the security forces in an arrangement that often forces consensus deals.
Bouteflika has not said whether he intends to run again. If and when he departs, competition for his job could upset that delicate arrangement. For now, he still holds many cards.
In a major shift, DRS investigations led by Major-General Mehena Djebbar now fall under the authority of the chief of staff and vice defense minister, Brigadier-General Gaed Salah, said two sources who asked not to be named.
Bouteflika has also sacked two heavyweight intelligence generals, General Bachir Tertag, in charge of counter-espionage, and an officer in charge of security abroad, according to two security sources who asked not to be identified.
CONSENSUS STILL POSSIBLE?
Some opponents of the government interpret the DRS changes as an attempt to stifle investigations into Bouteflika's allies, particularly former Energy Minister Chakib Khelil, who is facing corruption charges linked to energy contracts.
However, one source close to Bouteflika said his plan is "to make sure the DRS's top chieftains leave before he does, so a new political system can be installed, a system in which the DRS no longer plays a political role".
Despite Bouteflika's maneuvers, the military intelligence faction may still wield influence in deciding his successor.
"I can imagine a scenario where Bouteflika and Mediene, the top DRS boss, reach an agreement to secure the post-Bouteflika era," said former presidential candidate Nouredine Boukrouh. "It is not impossible that they can still agree over a candidate of consensus."
Riccardo Fabiani, an analyst with Eurasia Group, also said he believed the military intelligence network would still be in a position to force a consensus candidate before the 2014 ballot, despite "political gains for the Bouteflika clan".
In April 2012, Bouteflika said publicly that his generation's time was over, referring to the veteran independence-era leaders who effectively run the country.
Months before the election, Algerians still do not know who their candidates are, even though more than 100 political parties are now active. Most will field candidates with little chance of winning in a system still dominated by the FLN.
Among potential successors to Bouteflika are the technocrat prime minister, Sellal, 65, touted as a consensus candidate and potential economic reformer, and former FLN leader Ali Benflis.
Earlier this year Bouteflika bolstered his position in the ruling FLN party by ensuring that his choice, Amar Saadani, was selected to lead it, in preference to a rival backed by the security apparatus, according to analysts.
That choice of a Bouteflika loyalist, coupled with the cabinet reshuffle and the shift in DRS functions, analysts said, may at least for now show the man many opponents thought would not return is far from out of Algeria's political battle.
"If these prove to be true, Bouteflika may well have captured his opponent's queen and checkmate may not be too far off," said Geoff Porter of North Africa Risk Consulting.
(Writing by Patrick Markey; Editing by Alistair Lyon)
(This story was refiled to add dropped word "be" in the third paragraph)