THE CAUCASIAN nation of Azerbaijan is holding a parliamentary election today that could provide a turning point for a Muslim country about to come into oil riches, for the strategic and unsettled region around it, and for President Bush's democracy policy. Its autocratic government has promised a free and fair vote but taken only half steps toward carrying out the pledge. A relatively well-organized opposition coalition promises to refrain from violence but is preparing to launch demonstrations it hopes will lead to a democratic "color" revolution, like those in nearby Georgia and Ukraine. The Bush administration, which sees Azerbaijan as a valuable military ally and important new source of energy, as well as a possible model of democratization, may have some tough choices to make when the results -- and any fallout in the streets -- come in.

The last election in the former Soviet republic, in 2003, elected President Ilham Aliyev but was marred by blatant fraud and post-election violence. Since then Mr. Aliyev, who succeeded his father in power, has forged a close relationship with the Bush administration, based on his country's location between Russia, Iran and Central Asia and his willingness to cooperate closely with the U.S. military, which overflies Azerbaijan on the way to Iraq and Afghanistan. The United States backed the construction of a pipeline from Azerbaijan's capital, Baku, on the Caspian Sea, to Turkey that will soon allow the export of at least 1 million barrels of oil a day to Western markets, making Azerbaijan rich.

These strategic facts and Mr. Aliyev's generally pro-Western outlook prompted the administration to overlook the 2003 fraud and, at first, the repression that followed. This year, Mr. Bush and the State Department have pressed their ally to hold a fair vote, arguing that it will stabilize his regime and allow a new "strategic partnership" with the United States. The young president has made several concessions, permitting hundreds of independent candidates to register and giving them time on state media. After a visit by a senior State Department official last month, Mr. Aliyev agreed to a couple of anti-fraud measures, including inking voters' fingers, Iraq style, and Western non-government monitoring. But, fearful of a color revolution, Mr. Aliyev has also prevented opposition gatherings in the center of the capital and blocked one of his principal rivals from returning to the country from exile. Human Rights Watch concluded before the election that the possibility of a free vote had been "extinguished."

The administration has linked its judgment to that of the Organization for Security and Cooperation in Europe, whose criticism of the elections in Ukraine a year ago helped trigger its popular uprising. U.S. officials don't disguise their hope that an upbeat OSCE report will allow them to endorse the elections as a "step forward"; Mr. Aliyev awaits an invitation to the White House. But they also say they will not seek to sugarcoat a bad election or oppose opposition demonstrations. Their challenge this week will be to demonstrate to Mr. Aliyev, his opposition and the region that the U.S. commitment to democratization is serious -- even in a country that offers oil riches and military favors.