The two front-runners in Mexico's closest presidential race in history watched anxiously Thursday as an overnight vote tally recount saw the conservative candidate Felipe Calderon catch up to his leftist rival and pass him by a razor-thin margin.

Hundreds of Calderon supporters gathered at his campaign headquarters cheered wildly with the news as the ruling-party candidate who was shown winning by 1 percentage point in the preliminary count completed earlier in the week emerged once again to declare victory.

"We are ahead in the election for the presidency and the remaining votes to be counted will be in our favor," a smiling Calderon said to applause and whistles from his followers.

His opponent, Andres Manuel Lopez Obrador, remained holed up at his home awaiting the final vote count.

With nearly 98 percent of the vote tallies recounted, Calderon had 35.62 percent of the vote, while Lopez Obrador had 35.57. It was the first time since counting began early Wednesday that Calderon held the lead. Mexico's electoral officials said they would not announce any tendencies until the full count was completed.

Both campaigns insisted throughout the day that they would triumph when the final numbers came in, but asked their supporters to refrain from violence whatever the result.

In an exclusive interview with The Associated Press on Wednesday, Calderon offered to include Lopez Obrador in his Cabinet an effort to build a coalition government and avoid weeks of political impasse. But he said he did not believe his rival would accept, adding that the two men had not spoken to each other since Sunday's election.

Each campaign accused the other of trying to manipulate the vote counts to favor their candidate, while electoral officials implored them to refrain from declaring victory until the full count was complete.

Ruling party officials said Lopez Obrador had the lead earlier only because more votes had been counted in areas where he was strongest. They also accused the candidate's Democratic Revolution Party of stalling tactics in states where Calderon was strongest, saying it was deliberately trying to give the impression that Lopez Obrador was ahead as the count progressed.

On Wednesday, Lopez Obrador threatened to ignore the final tally because of "serious evidence of fraud." Leonel Cota, president of the Democratic Revolution Party, accused election officials of deliberately mishandling the preliminary vote count Sunday to confirm a win for Calderon. He said Lopez Obrador won Sunday's vote.

"We are not going to recognize an election that showed serious evidence of fraud, that was dirty from the start, manipulated from the start," he said.

His party has claimed that more than 18,000 polling places had more votes cast than there were ballots and nearly 800 had more votes than there were registered voters.

When polls closed Sunday, citizens staffing the 130,488 polling places opened the ballot boxes and counted the votes, then sealed them into packages and attacked a report. The electoral institute then posted preliminary results on its Web site from about 41 million ballots cast.

The sealed packages were delivered to district headquarters, where election workers used the tallies Wednesday to add up the formal, legal vote totals.

Workers were not reviewing individual ballots except when the packages appeared tampered with or their tallies were missing, illegible or inconsistent.

Cota said Democratic Revolution would not recognize the results without a ballot-by-ballot recount. But Ugalde said that was not possible.

"Mexican law is very clear on when a ballot box can be opened: only when there are problems with the vote tallies, when the tally sheet has obviously been changed, or when the box has been tampered with," Ugalde said.

Once the count is complete, the seven-judge Federal Electoral Tribunal will hear any complaints and can overturn elections. By law, it must certify a winner by Sept. 6, and its decision is final.

Cota said the party might take its case to international tribunals.

Ugalde scolded both candidates for prematurely declaring victory, saying: "No political party can declare or affirm, at this time, that its candidate has received the largest number of votes."

Lopez Obrador, a former Mexico City mayor, called again Wednesday for his supporters to remain calm, but he could mobilize millions as he has in past legal disputes and he hinted that he might. "The political stability of the country hangs in the balance," he said.

In the AP interview, Calderon said demonstrations would be irresponsible.

"Elections are not won on the street," he said. "They are won in the voting places."

The review that began Wednesday is a crucial step in proving the elections were clean to a nation that emerged only six years ago from 71 years of one-party rule replete with election fraud.

Most international observers said the election was fair and properly carried out by Mexico's world-renowned system, held up as a model to emerging democracies in Iraq and Haiti.

Associated Press writers Will Weissert and Theresa Braine in Mexico City contributed to this report.

Copyright 2006 The Associated Press.

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