Something extraordinary is happening here Monday, in a region where autocracy is the norm: a genuinely competitive national election. What remains to be seen is whether it will propel Georgia toward the Western-style liberal democracy the United States has been trying to promote here for the past eight years — or plunge it into violent political turmoil.

Since taking power in the 2003 Rose Revolution, effervescent President Mikheil Saakashvili and a small circle of mostly young reformers have dominated political life in this former Soviet republic, even while aggressively seeking to integrate Georgia into Western institutions like NATO and the European Union. Georgia has been a major recipient of U.S. foreign aid and a bipartisan favorite of Washington internationalists who hope to see a genuine democracy take root in a region dominated by Vladimir Putin-style strongmen.

Now, partly because of its own missteps, Saakashvili’s party faces a serious challenge from a coalition of parties that have gravitated to a Georgian billionaire named Bidzina Ivanishvili. Georgia’s new would-be savior has invested tens of millions in a campaign that has appeared as much aimed at discrediting Saakashvili and the political system — especially in Washington — as at winning Monday’s parliamentary election.

The opposition Georgian Dream coalition appears likely to win a substantial percentage of the vote. A sensational scandal about torture in state prisons, broken two weeks ago by a television station Ivanishvili controls, has reduced the government’s lead in its own polls from more than 20 points to single digits. Saakashvili’s campaigners admit they are likely to lose the popular vote in the capital, the center of political life in a country of under 5 million people.

In theory, this could be a great thing — the introduction of real checks and balances on a government that has done an impressive job fighting corruption and modernizing the economy but less so in building democratic institutions. With constitutional reforms due to shift political power from the president to parliament after Saakashvili leaves office next year, a parliament where a ruling party faces a strong, legal and independent opposition would sharply distinguish Georgia from most other post-Soviet states — starting with Russia.

The problem is that neither side in this Caucasian standoff has been willing to play entirely by democratic rules. Saakashvili, who at 44 has lost none of the brashness that has made him a controversial figure in the West — and a nemesis of Putinresponded to Ivanishvili’s challenge by stripping him of his citizenship, putting pressure on a Georgian bank he owned and pushing through a campaign finance law aimed at limiting how much he could spend. The billionaire was eventually fined $45 million for making illegal campaign contributions.

Ivanishvili, for his part, has conducted an eccentric campaign, passing up free air time on the state television channel and sitting out a televised debate while spending a reported $600,000 a month on Washington lobbyists. His operation publicizes polls showing him with a wildly improbable lead — 62 to 25 percent at last report — while the candidate declares that any other result will be proof of fraud. Ivanishvili-funded observers and quick counters are poised to back up this story; international monitors fear that if the official results show a government victory, Ivanishvili will summon his supporters to the streets in an attempt to trigger another popular revolution.

In a meeting Sunday at his palatial, glass-walled mansion overlooking Tbilisi with a group of journalists I joined, brought here by the German Marshall Fund, Ivanishvili insisted he had no intention of provoking such unrest. If a government election victory was endorsed by international monitors such as the U.S. National Democratic Institute, he said, he would accept the result and his party would take its seats in parliament. “We have no problem taking the role of opposition,” he said.

The country nonetheless appears deeply polarized, with each side claiming that the other is bent on stealing the election and establishing a corrupt dictatorship. “I can’t imagine any result that will be acceptable to both sides,” said Nikoloz Laliashvili, a parliamentarian whose Christian Democratic party has been caught in the middle. “The situation in this country after the elections will be extremely turbulent and extremely fragile.”

That would cheer Putin, who recently took credit for planning Russia’s 2008 invasion of Georgia and whose army chose September to conduct maneuvers inside the separatist territories it occupies. In the back of their minds Saakashvili’s team contemplate a worst-case scenario: Citing post-election turmoil and provocations on the cease-fire line, Putin sends his army to Tbilisi to finish off a regime whose pro-Western stance infuriates him.

For now, this is one country where U.S. influence remains paramount. Both sides are vigorously seeking validation from Washington; the State Department, for its part, has been quietly pushing for a clean election and for peaceful acceptance of the results. If either government or opposition violate these strictures, it will be critical that the Obama administration speak out.