By William Maclean
NAIROBI (Reuters) - Few African wars have proved as tough to solve as the bloodshed in Burundi, riven by hatreds that have long kept the entire Great Lakes region in turmoil.

So the continent's diplomats can be expected to cheer loudly this week if the central African country manages a smooth handover of the presidency as part of marathon attempts to end a decade of war.

The planned installation of the first Hutu head of state in seven years on Wednesday will send a clear message of change in a country historically dominated by minority Tutsis, they hope.

"Burundi may be heading towards an imperfect peace but it is the best chance of peace it has got," said Nicholas McGowan of the U.N. Office for the Coordination of Humanitarian Affairs.

"The test is whether the country can hand power from a Tutsi to a Hutu -- and the international community has a key role in assuring Burundi of its support during the transition."

In a move of powerful symbolism, Hutu politician Domitien Ndayizeye will take over from Pierre Buyoya, a Tutsi, becoming the first Hutu president since Buyoya overthrew then Hutu President Sylvestre Ntibantunganya in 1996.

Ndayizeye will be president for the second half of a three-year transition to democracy brokered by former South African President Nelson Mandela in 2000 to end a war that has cost about 300,000 lives since 1993.

The peace accord aims to end the war by cementing ethnic power-sharing, reforming the Tutsi-dominated army and civil service and paving the way to elections in 18 months' time.

The transition was launched in November 2001 with Buyoya as president of the interim government for the first 18 months.

SHAKY CEASEFIRE

Little reform was accomplished on Buyoya's watch, so now Ndayizeye will have to negotiate major changes while also trying to implement a so-far shaky ceasefire deal signed in December.

His task is formidable. Ndayizeye is seen by many rebels as a Hutu sell-out who will act merely as a figurehead atop a system of Tutsi supremacy.

He will also have to work with Tutsi hardliners who fear Hutu power will inevitable result in massacres of Tutsis in a replay of Rwanda's 1994 genocide.

But diplomats say that if Ndayizeye can show he has some real power, the rebels will be hard pushed to explain to ordinary Hutus why they are fighting a Hutu president.

Western donors and African countries like South Africa are anxious to stabilise the region and above all avoid a genocide like that in which 800,000 Tutsis and moderate Hutus were butchered by extremist Hutus in Rwanda.

Burundi's post-independence history, like Rwanda's, has been studded with massacres and failed attempts to make peace. Memories of the Rwandan genocide continue to help deter investment in the entire continent.

So far the ceasefire signed in December by the government and the main Hutu rebel group, the Forces for the Defence of Democracy (FDD), is a dead letter.

But diplomats say that is because the ceasefire was a rushed effort that made the mistake of leaving for later discussion key issues such as how to demobilise and disarm the combatants.

Patient negotiation, backed by outside pressure on both sides and more relief aid, may just hasten peace, they say.

"The ultimate dream of the Burundian people is that the fighting stops. The fact that this has not happened has undermined international confidence," said Jan van Eck, a South African analyst with long experience of Burundi.

The process got a boost on Sunday when the first contingent of an African Union peacekeeping force arrived to monitor the ceasefire and provide safe passage for the warring parties during planned movements to designated assembly areas.