Yerevan: Thousands of protesters gathered in Armenia's capital on Wednesday claiming a presidential election was rigged to hand victory to Prime Minister Serzh Sarksyan, but Western observers called it broadly fair.

Sarksyan has promised to continue the policies of outgoing President Robert Kocharyan, his close ally. The new leader's biggest challenges will be a simmering territorial conflict with neighbouring Azerbaijan and frozen ties with Turkey.

Sarksyan took 52.86 percent of the votes, the Central Election Committee said, giving him enough to win outright in the the first round.

Nearest rival Levon Ter-Petrosyan, Armenia's first president after independence from the Soviet Union, had 21.5 per cent.

"Yesterday's presidential election in Armenia was conducted mostly in line with the country's international commitments," observers from the Organisation for Security and Cooperation in Europe (OSCE) said in a statement.

"Further improvements are necessary to address remaining challenges," it added.

Earlier, Kocharyan congratulated 53-year-old Sarksyan on his victory in what he called free and fair elections.

Ter-Petrosyan's supporters though refused to recognise the result and said they would protest until Sarksyan's victory was overturned. They said Tuesday's vote was marred by ballot-stuffing and intimidation of the opposition.

Between 15,000 and 20,000 protesters gathered at a rally in central Yerevan, chanting "Levon! Levon!" and "Serzh: leave!", a reporter said. They were preparing to march towards the Central Election Commission building. Police kept their distance from the protesters.