REYKJAVIK, (Reuters):

Icelanders voted yesterday in an election - that pits environmentalists against big industry backers - race experts believe may reshape the island nation's ruling coalition and potentially its economic future.

"It will be very close - neck and neck," said political science professor Olafur Hardarson at the University of Iceland.

The election race has been dominated by a single issue: the tempo of big-industry development in Iceland.

The long-ruling Independence-Progressive Party coalition wants aluminium giants like Alcoa to keep building smelters fuelled by Iceland's geothermal and hydroelectric power, a trend that has driven rapid economic growth for the past few years.

Main opposition parties, the Left Greens and Social Democrats, want development halted until the environmental and economic impact of the latest projects become clear.

Prime Minister Geir Haarde, whose Independence Party led with 37 per cent in the final poll, expressed confidence after voting in Reykjavik as wind gusted outside.

"I'm very optimistic," he told Reuters. "It's a beautiful day and I have no real reason to be worried or concerned."

Minutes later, equally upbeat Social Democrat leader Ingibjorg Solrun Gisladottir - Haarde's main rival - voted at the same primary school. The leaders did not meet.

"These are the most exciting elections in decades," Gisladottir said. "It's important the incumbent government loses today. We need a new, efficient, powerful, preferably left-wing government in which the Social Democrats would be the central pillar."

LONDON (AP):

Treasury chief Gordon Brown on Friday launched his campaign to become Britain's next prime minister and win back voters disenchanted after a decade of Labour Party rule.

He said his government would honor Britain's commitments in Iraq but acknowledged mistakes had been made; and he pledged that his government would be more open and cooperate more with Parliament.

"One of my first acts as prime minister would be to restore power to Parliament in order to restore trust in British democracy," said Brown, whose party has fallen behind the opposition Conservative Party in opinion polls for more than a year.

Brown, who faces no serious opposition to succeeding Blair as party leader and prime minister, said he will use the next weeks to listen to people's concerns.

"I will listen, and I will learn. I will strive to meet people's aspirations," he told a news conference. "I want to lead a government humble enough to know its place, where I will always strive to be - on the people's side."

He acknowledged mistakes in Iraq, but didn't name any.

"We will keep our obligations to the Iraqi people. These are obligations that are part of a U.N. resolution; they are in support of a democracy."

He said he would be talking to Iraqi government officials and British forces in the country.