Lula setback in Brazil city poll

President Lula must step down in 2010 at the end of two terms in office

The right-wing mayor of Brazil's largest city, Sao Paulo, has been re-elected in what is seen as a blow to President Luiz Inacio Lula da Silva.

Gilberto Kassab of the centre-right Democrats Party defeated the ruling Workers' party candidate in a run-off.

Correspondents say Mr Kassab's win will help a presidential poll bid by his ally, state governor Jose Serra.

Meanwhile in Rio de Janeiro, a centrist backed by President Lula, Eduardo Paes, beat ex-revolutionary Fernando Gabeira.

In the key south-eastern city of Belo Horizonte, a candidate backed by the Workers' Party and the local Governor Aecio Neves was elected. Mr Neves, from the same party as Mr Serra, is also regarded as a potential candidate for the presidency in 2010.

Voters chose mayors and councillors in run-offs across the country. The Workers' Party won in many cities in the first round.

Brazilian mayors are powerful figures, and the elections are seen as an indicator of who may succeed President Lula when he steps down in 2010.

Brazil's constitution limits the president to two consecutive terms and the PT has yet to select a candidate for the presidential election.

Campaigning for the elections centred on crime, unemployment, health care and education.

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