UPDATE 3-Tunisia's ousted president Ben Ali dies in Saudi exile

* Ben Ali fled Tunisia as compatriots rose up

* A former security chief, he ruled Tunisia for 23 years

* Critics said he ran an oppressive police state (Adds reaction from Tunisians)

By Angus McDowall and Tarek Amara

TUNIS, Sept 19 (Reuters) - Tunisia's Zine El-Abidine Ben Ali, whose overthrow in a 2011 uprising triggered the "Arab Spring" revolutions, died in exile in Saudi Arabia on Thursday, days after a free presidential vote in his homeland.

His funeral will take place on Friday in Saudi Arabia, his family lawyer, Mounir Ben Salha, told Reuters.

"It is the end of dictators like him. We cannot forget that he destroyed our country ... he gave orders to kill civilians in protests in 2011," said Imad Layouni, an unemployed 26-year-old in a Tunis coffee shop.

Ben Ali fled Tunisia in January 2011 as his compatriots - many of them angered after a vegetable seller set himself on fire a few weeks earlier in protest at the police - rose up against his oppressive rule in a revolution that inspired other uprisings in the Middle East and led to a democratic transition at home.

On Sunday, they voted in an election that featured candidates from across the political spectrum, sending two political outsiders through to a second round vote unthinkable during Ben Ali's two decades in power.

However, while Tunisians have enjoyed a much smoother march to democracy than citizens of the other Arab states that also rose up in 2011, many of them are economically worse off than they were under Ben Ali.

While almost all the candidates in Sunday's election were vocal champions of the revolution, one of them, Abir Moussi, campaigned as a supporter of Ben Ali's ousted government, receiving 4% of the votes.

"It is a sign of the intolerance in country, which claims to be a democracy, that he died in Saudi Arabia," said Salwa Riahi, a doctor in Tunis.

A former security chief, Ben Ali had run Tunisia for 23 years, taking power when, as prime minister in 1987, he declared president-for-life Habib Bourguiba medically unfit to rule.

In office, he sought to stifle any form of political dissent while opening up the economy, a policy that led to rapid growth but also fuelled grotesque inequality and accusations of brazen corruption, not least among his own relatives.

During that era, his photograph was displayed in every shop, school and government office from the beach resorts of the Mediterranean coast to the impoverished villages and mining towns of Tunisia's hilly interior.

On the few occasions his rule was put to the vote, he faced only nominal opposition and won re-election by more than 99%.

On Sunday, by contrast Tunisians chose between 26 candidates including both Ben Ali's own former supporter Moussi and an ex-political prisoner running for the Islamist Ennahda party, which he banned.

Ben Ali's rise began in the army after Bourguiba won Tunisia's independence from France in 1956. He was head of military security from 1964, and of national security from 1977.

After a three-year stint as ambassador to Poland, he was called back to his old security job in 1984 to quell riots over bread prices. Now a general, he was made interior minister in 1986 and prime minister in 1987.

It took him less than three weeks to arrange a new promotion to the top job, bringing in a team of doctors to declare Bourguiba senile, meaning he would automatically take over as head of state.

His first decade as president involved a big economic restructuring - backed by the International Monetary Fund and World Bank - and an annual growth rate slightly over 4% a year.

POLICE STATE

Wedged between Muammar Gaddafi's Libya and an Algeria thrust into civil war between the army-backed government and Islamist militants, Ben Ali's Tunisia followed the post-independence path of secularism and openness to the outside.

But within, critics said it was a police state where few dared challenge an all-powerful government. In a country where many had experienced life under democracy elsewhere, Ben Ali's oppressive state was reason to chafe.

Meanwhile, the elite were accumulating wealth in their extravagant seaside villas. The lavish lifestyle of Ben Ali's wife, Leila Trabelsi, and her clique of rich relatives, came to symbolise the corruption of an era.

Out in the provinces, in the shabby towns of the south and the rural villages without running water, anger was growing, leading to a small protest movement in 2008, sometimes called "the little revolution".

Eight years on from the real uprising, life is still tough in those areas, with unemployment higher than in 2010 and public services seeming to have deteriorated.

Tunisians often complain that living standards have dropped since the revolution, and speak of life under Ben Ali as more materially comfortable. But few speak with nostalgia of his style of rule, or say they want an end to democracy.

For Ben Ali, the sudden end came when a desperate vegetable seller in the humble town of Sidi Bouzid set himself alight in December 2010 after police confiscated his barrow.

Mohammed Bouazizi's funeral was attended by tens of thousands of furious people, sparking weeks of ever bigger protests in which scores of people were killed.

By mid January 2011, Ben Ali had had enough, and boarded a plane for Saudi Arabia.

A Tunisian court sentenced him in absentia later that year to 35 years in prison. He never appeared in public again.

(Reporting By Tarek Amara and Angus McDowall Editing by Andrew Heavens, Angus MacSwan, William Maclean and Giles Elgood)