BOGOTA, May 31 (Reuters) – Former Colombian Defense Minister Juan Manuel Santos is favored to win a June run-off after a solid victory in a first round presidential vote that consolidated his position as heir to the popular incumbent.

Santos won a strong lead on Sunday against former Bogota mayor Antanas Mockus, but fell just shy of the votes needed for an outright victory to succeed President Alvaro Uribe, a U.S. ally praised for his war on leftist rebels.

Jobs, the economic recovery and Colombia’s tense relations with neighboring Venezuela will be key issues now during the run-off when Santos will seek to distance himself from scandals in Uribe’s government that helped fuel support for Mockus.

Santos, the scion of a wealthy Bogota family, won 47 percent of the votes against Mockus with 22 percent on Sunday, leaving him with a clear advantage when the two men compete in the June 20 second round run-off.

“The Colombian people didn’t want to take a leap into the dark and they showed it with this election,” Santos told local Caracol radio, calling for other parties to join him in an alliance for the second round.

Colombia’s peso COP=RR and local TES bonds strengthened after Santos’ victory, as investors applauded the win by a candidate seen as a clear guardian of Uribe’s tough security line and pro-market policies. [ID:nN31252047]

The peso rose 0.80 percent in next-day trading to 1,957 pesos against the dollar compared with Friday’s close. Benchmark July 2020 TES bond TFIT15240720 yields closed at 7.933 percent against 8.107 percent on Friday.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For more on the elections, click on [ID:nCOLOMBIA]

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

MORE REGIONAL TENSIONS

Santos benefited from a fall in rebel violence, increased investment and strong rural support to finish far ahead of Mockus, despite polls before the vote showing them tied.

But Mockus managed to tap into frustration over issues such as joblessness, healthcare, and voter weariness over human rights and graft scandals that tarnished Uribe’s second term. Uribe is banned by the constitution from seeking a third term.

“There is also a strong sense in Colombia that Uribe left many issues unaddressed,” said Myles Frechette, a former U.S. ambassador to Colombia. “The weight of those unaddressed challenges should prod Santos to go beyond providing a continuity of Uribe.”

Mockus had surged in polls before the election to tie with Santos with a message of clean government. But Santos revamped his campaign to focus on jobs and the economy and also benefited from gaffes by Mockus during presidential debates.

Polls may have underestimated support for Santos in rural areas, which have benefited the most from Uribe’s security drive against Marxist FARC guerrillas, right-wing paramilitaries and cocaine lords.

Investors applauded Santos’ wide margin as the U.S.- and British-educated former finance minister is seen as sticking closer to Uribe’s stances on regulation, taxes and fiscal restraint than Mockus.

But a Santos victory in June will test ties with Venezuela where socialist President Hugo Chavez has called the candidate a “threat” in exchanges during a diplomatic dispute that has battered trade between the Andean neighbors.

Santos is seen by Wall Street as better placed to manage Congress, where his U Party has a strong representation. Mockus’ Green party has few seats and he would struggle to push through any ambitious reforms.

Uribe’s U Party, headed by Santos, is the strongest bloc in the Congress and is a former ally with Cambio Radical, whose candidate German Vargas Lleras came third in Sunday’s vote with just over 10 percent of the votes.

While Mockus has flirted with an alliance with the leftist Democratic Pole Party or PDA, he risks alienating moderate Uribe supporters who distrust Colombia’s political left because of its association with past guerrilla movements.

“This would be a major gamble,” said Christian Voelkel, a IHS Global Insight analyst. “An alliance with the PDA, parts of which belong to the unreconstructed political left, would almost certainly alienate crucially needed centrist voters.”

(Additional reporting by Frank Jack Daniel, Nelson Bocanegra and Luis Jaime Acosta in Bogota, Editing by Sandra Maler)