Former military president Hugo Banzer continued to hold a significant lead in yesterday's presidential elections in South America's poorest and most politically volatile nation, but without the absolute majority needed to avoid a runoff vote by the new congress.

Late tonight, the independent television station Channel 9 reported unofficially that with more than one-third of the districts reporting, Banzer, a rightist, led with 36 percent of the vote. His nearest rival, Victor Paz Estenssoro, 77, who was president twice, was a distant second with 28 percent. Political analysts said Banzer, 59, a retired general, would likely place first when all the ballots were counted, although with a reduced margin.

Banzer at a news conference tonight declared victory: "The Nationalist Democratic Action has won this election. We hope this victory will be respected no matter how narrow the margin."

The constitution stipulates that if no candidate wins at least 50 percent of the vote, congress must choose between the three top vote getters.

The election outcome was seen by many here as a vindication for Banzer, who took power in 1971 following the overthrow of a leftist military strongman, general Juan Jose Torres. Banzer is generally credited with having brought seven years of political stability, but critics charged that he ruthlessly repressed labor and political dissenters.

The Banzer who campaigned for president appeared to be a more relaxed, folksy person than the nervous, insecure general of old, although most opposition politicians still referred to him as a "dictator." Banzer has told intimates that he ran again in part to help establish a democratic right-of-center party, long absent here.

Meanwhile, the country's military appeared to be ready to support a peaceful transfer of power. Since Banzer left office in 1978, Bolivia has had 11 governments, five of them brought to power through military takeovers.

"We're doing very well, and we expect our margin to hold up," said Ronald MacLean, 37, a Harvard graduate who swept to victory as La Paz mayor on Banzer's ticket.

Banzer did well in most of the country's urban areas, and the size of his victory was in part attributed to a large protest vote against a 33-month-old center-left government of President Hernan Siles Zuazo. The extent of the voter backlash generated by Bolivia's inflation and economic stagnation was shown by the poor showing of official candidate, Roberto Jordan Pando, 55, who had less than 4 percent of the votes counted.

Some political analysts said yesterday's vote marked a fundamental shift in Bolivia's traditionally left-leaning politics, both because of the rightward shift evidenced by the strength of Banzer and center-right Paz Estenssoro, and also because of the generational change in political leadership implied by the election.

These observers say that whatever the outcome of yesterday's vote, it appears unlikely that the three men who for nearly 40 years dominated this country's turbulent electoral scene -- Paz Estenssoro, Siles and leftist mine workers leader Juan Lechin -- will be able to do so in the next election.

The three, who were instrumental in effecting a broad social revolution here in the early 1950s, have had longstanding personal feuds that many believe weakened democracy's chances here in the past.

There was much speculation about the changes a Banzer presidency would bring. Banzer has assembled a small team of Harvard-educated technocrats that he plans to unleash on Bolivia's large, inefficient public sector.