(Adds extension of emergency rule in one state, paras 13-14) By Barry Moody ABUJA, April 18 (Reuters) - Nigeria is likely to go ahead with Saturday's watershed presidential election, despite an opposition demand that it should be postponed because of rigged state polls, political sources said on Wednesday. The election was earlier thrown into doubt when a coalition of 18 opposition parties said a fair vote was impossible after wholesale fraud and violence in the state polls last weekend. But the government flatly rejected a delay and cracks quickly appeared in the opposition front on Wednesday. The sources said the two main opposition candidates, former military ruler Muhammadu Buhari and Vice President Atiku Abubakar, were expected to run, abandoning calls for a boycott. "We hear that Buhari is caving into pressure to run and if that is the case there is no doubt our candidate will also contest," a senior official in Abubakar's Action Congress said. Early on Wednesday the opposition coalition, including Buhari and Abubakar, rejected the state results and demanded replacement of the official electoral commission before a rescheduled presidential vote was held. But Information Minister Frank Nweke told Reuters: "This administration is committed to going through with the 2007 elections on schedule." President Olusegun Obasanjo must stand down in the election after serving two terms but the opposition accuses him of massively manipulating the process to keep his People's Democratic Party in power and retain his personal influence. The election is intended to usher in the first transfer from one civilian leader to another since independence in 1960. Obasanjo handpicked the PDP candidate, obscure northern governor Umaru Yar'Adua. The opposition says he would be an Obasanjo puppet. BATTLE WITH ISLAMIC MILITANTS As political manoeuvring went on in Abuja, troops in northern Nigeria killed 25 Islamic militants in a day-long battle on the outskirts of the town of Kano, following an ambush the day before that killed 13 police. The violence did not seem election-related although tension is high in the area because of the polls. Obasanjo announced on nationwide television on Wednesday night that he had extended emergency rule for a month in the small southwestern state of Ekiti because of unrest following fighting there during the state polls. Emergency rule was first imposed six months ago after a candidate was assassinated. The Independent National Electoral Commission (INEC) says the PDP has won 27 of 34 states declared so far. Bisi Akande, head of Abubakar's Action Congress, told a news conference the PDP was conducting the "most fraudulent elections ever in the nation's history." He accused Obasanjo of causing chaos so he could declare emergency rule. Western nations are anxious to ensure a democratic handover in the former British colony, Africa's most populous nation and biggest oil producer. British High Commissioner Sir Richard Gozney said at an embassy reception on Tuesday night that there were "significant shortcomings" in the state polls and urged the police to prevent more of the violence that killed 50 people in that vote. "We want to say Nigeria has taken a big step forward in transferring power from one civilian government to another for the first time. We need some improvements to help us to reach a positive judgment," he said in a speech. Local election observers said results in 10 of the 36 states did not reflect the will of the people and should be rejected. (Additional reporting by Tom Ashby, Camillus Eboh and Felix Onuah in Abuja, Daniel Flynn and Mike Oboh in Kano)
