UPDATE 3-Military killing clouds Guinea Bissau vote

* Killing follows peaceful presidential vote

* Tiny West African state a cocaine-trafficking hub

* Officials: killing will not hinder electoral process (Adds comment from observer missions, details)

By Richard Valdmanis and Alberto Dabo

BISSAU, March 19 (Reuters) - Guinea Bissau's former head of military intelligence was shot dead near his home in the capital Bissau overnight just hours after a peaceful presidential vote, witnesses and security officials said on Monday.

The killing of Colonel Samba Diallo follows a rash of political assassinations in the tiny West African state, a known haven for cocaine smugglers, at a time when many had hoped the election would usher in a period of greater stability.

A resident of Diallo's neighbourhood told Reuters that men armed with military-issue rifles shot Diallo just before midnight on Sunday. Another witness said he saw Diallo's body at a hospital morgue after the shooting.

Guinea Bissau's armed forces have been notoriously unruly since independence from Portugal in 1974. Rivalries between some senior officers have intensified as they compete for control over the growing drugs trade, say analysts.

Diallo was seen as an ally of ruling party presidential candidate and former prime minister Carlos Gomes Junior, and was widely feared during his time as head of military intelligence for his alleged role in coups and political assassinations, diplomatic sources said.

But officials said there was no link between the killing and the vote. "The events of yesterday have nothing to do with the election. Nothing, absolutely nothing, should put in doubt the smooth development of the electoral process," military spokesman Daha Bana told a press conference.

Election commission president Desejado Lima da Costa said after meeting military officials: "We have been assured total cooperation by the armed forces in ensuring security for the electoral process all the way to the finish."

He said the first preliminary results from Sunday's poll will be issued by next weekend.

Family members gathered on Monday morning at Diallo's house, a small cinderblock building with a tin roof. Women moaned and held their heads and young men gathered on the roadside.

"I don't know if this was related to the election or not," said his wife Fatoumata.

Diallo was head of military intelligence under ex-Army Chief of Staff Jose Zamora Induta until the two were deposed and temporarily jailed in an April 2010 mutiny that Western diplomats said was likely over control of the lucrative drugs trade between Latin America and Europe.

Gomes Junior was also briefly arrested during the mutiny but has since said he has developed a "good working relationship with the military", including the new military Chief of Staff Antonio Indjai.

Campaigning and voting was peaceful in the presidential election, which was held to replace president Malam Bacai Sanha, who died in a Paris hospital in January after a long illness. Election observers said the voting appeared free and fair.

Gomes Junior is favourite to win the poll, but faces a tough challenge from Manuel Sherifo Nhamadjo, who dropped out of the ruling party to run against him, and former president Kumba Yala, who shares the Balanta ethnicity with a quarter of the population and most of the army.

Gomes Junior's rivals accuse him of fomenting instability and tolerating increased drugs-running during his time as premier - a period of many political assassinations including that of President Joao Bernardo Vieira in 2009.

Gomes Junior has denied the accusations, and his outspoken opposition to drugs has helped win him tacit support from foreign partners including the United States and Angola.

Guinea Bissau, a country of 1.6 million people whose main official export is cashew nuts, is rich in natural resources but has failed to attract investment because of its near-constant turmoil since independence from Portugal.

Angola, which is trying to develop a bauxite mine and build a deepwater port in the south, is trying to help Guinea Bissau reform its unruly army. (Editing by Tim Pearce and Andrew Heavens)