Public opinion polls predict a comfortable win for Susilo Bambang Yudhoyono in Monday's ballot, the first time Indonesians will choose their president directly and a sign of the country's stability despite a string of al-Qaida-linked attacks.
"If all goes well on Monday, it will cement Indonesia's reputation as a member of the community of democracies," said Paul Rowland of the National Democratic Institute.
A peaceful political transition in Indonesia, the world's largest Islamic nation, also will be considered proof that democracy can prosper in the Muslim world, most of which is ruled by authoritarian regimes.
"When voters are asked, they see no inherent conflict between Islam and democracy," Rowland said.
Both Megawati, the daughter of Indonesia's founding father Sukarno, and Yudhoyono, known universally by his initials SBY, are practicing Muslims but have a firmly secular nationalist outlook.
"We see that democratic steps are taking place here, and due to this we are confident the democracy in Iraq will find its way," said Redha Taki, of the Supreme Council for Islamic Revolution in Iraq. Taki, an Iraqi, is visiting Indonesia to monitor the vote before Iraq holds its own next year.
Yudhoyono won the first round of elections in July but did not receive an overall majority, requiring Monday's run-off for the five-year term.
Candidate Susilo Yudhoyono (L)
has Washington's support
Yudhoyono is favoured in Washington for his tough stance on terrorism and for cracking down on the al-Qaida-linked Jamaah Islamiyah network blamed for a spate of deadly bombings in recent years, including last week's suicide bombing at the Australian Embassy that killed nine people.
The Bush administration is concerned about the group providing a foothold for al-Qaida in the strategically vital archipelago of 13,000 islands straddling the confluence of the Pacific and Indian oceans.
Poverty and corruption
Besides terrorism, Indonesia is saddled with widespread poverty, endemic corruption, a moribund economy and several bloody separatist conflicts in distant provinces.
Megawati's campaign on Saturday insisted their candidate would win, and said the opinion polls, which accurately predicted Yudhoyono's victory in the July polls, understated the level of her support.
Indonesia is saddled with
"The mood is upbeat, positive," said campaign manager Jacob Tobing. "Our people are working hard at the grassroots level."
Suharto was overthrown in 1998 amid nationwide riots. His hand-picked successor, BJ Habibie, introduced sweeping democratic reforms - including free elections - but was defeated in the first free ballot in 1999.
Megawati's Democratic Party of Struggle won the most votes in that poll, but lawmakers, who chose the president then, picked moderate cleric Abdurrahman Wahid for the top post and Megawati as his deputy.
However, Wahid proved unable to rein in political and economic chaos, and parliament installed Megawati as president in 2001.
Her administration has stabilised the economy and government of the nation of 210 million people.
But Megawati, 57, has seen her popularity plummet because she is considered to have abandoned her party's main constituencies, the working class and urban poor, and sided with the corrupt military, political and business elites.
She further alienated core supporters when she teamed up with Suharto's political machine and the country's largest political party, Golkar, in a coalition to save her job.
Security is also a major issue
in the country
Yudhoyono, 55, was Megawati's closest associate in the Cabinet, where he was senior minister for security. But he deftly managed to dissociate himself from her administration and declared himself a man of the people.
All opinion polls show Indonesians craving change, and voters perceive SBY as a clean, strong leader able to eradicate graft, settle separatist conflicts and revive the economy.
Despite being a former four-star general, Yudhoyono has distanced himself from Suharto's militaristic legacy and has pledged to push reforms meant to bring the powerful armed forces under civilian control.
Yudhoyono was instrumental in arranging a 2003 truce with separatist fighters in the northwestern Aceh province. But the peace deal collapsed after Megawati sided with hard-line generals and ordered an offensive to eradicate the 28-year insurgency.
Foreign mediators say they do not expect the warring sides in Indonesia's deadliest conflict to return to the negotiating table if Megawati is re-elected, but that talks are likely to reopen next year if Yudhoyono wins.