* Ennahda took moderate stance after 2011 revolution
* Role in austerity policies hurt it with poor voters
* Main contender in Sunday's election despite falling vote share
By Mohammed Argoubi and Angus McDowall
AL-ALIA, Tunisia, Oct 2 (Reuters) - The annoyance among voters in the hilltop town of al-Alia shows the dilemma facing Tunisia's moderate Islamist Ennahda party as it seeks to win Sunday's parliamentary election after years of sharing power with the secular political elite.
Ennahda's fate will not only resonate in Tunisia. Its effort to chart a moderate path is being watched across an Arab world that has for decades failed to peacefully accommodate its Islamist and nationalist movements.
"Ennahda's sympathisers abandoned it because of its concessions and only its own people are left," said Mohammed Amin, 35, a truck driver sitting under a tree near an Ennahda election stand opposite the town hall.
Ennahda's national vote share has steadily fallen since Tunisia's first free election in 2011, raising questions over its strategy and ideology as it seeks to recover from a presidential vote last month in which it came third.
Where once it could rely on the support of Tunisia's socially conservative, less developed interior, it now faces a challenge from populist outsiders who challenge the main parties over poverty.
Having disappointed Islamists by rebranding itself a "Muslim democrat" party, and poor Tunisians by joining governments that failed to improve their lot, it is trying to woo back its base.
But after years in government making the compromises it saw as necessary to maintain social order and tackle deficits, it cannot easily regain its old, popular image as a party of revolution without rejecting its own recent history.
It has embraced Kais Said, a socially conservative law professor who as an independent candidate got most votes in the first round of the presidential election, formally backing him in the Oct. 13 second-round runoff.
In doing so, it is also positioning itself against Said's opponent, the television mogul Nabil Karoui, who faces trial for tax evasion and money laundering, which he denies.
Karoui has for years used his television station and his anti-poverty charity to develop an image as the champion of Tunisia's poor, though his rivals paint him corrupt for his personal wealth and ties to the old ruling elite.
In al-Alia, a party stronghold in one of the regions where its vote has fallen most steeply, Ennahda activists blamed Karoui for their problems.
"He worked for three years targeting poverty and he is what led to the reverses for all parties, not just Ennahda," said party member Mehdi al-Habib.
Last week veteran Ennahda leader Rached Ghannouchi ripped into Karoui at a news conference, promoting the advantages of any future alliance between Said and Ennahda MPs.
The parliamentary election has long been Ennahda's focus because the party that gets most seats stands the best chance of choosing a prime minister and forming a government, while the president's powers are relatively limited.
Banned before the 2011 uprising, Ennahda emerged afterwards as the strongest party, seen by opponents as reactionary and dangerous, and by supporters as the voice of the revolution.
However, its election victory that year with 1.5 million votes, 37% of the total, led secular Tunisians to push back, unnerved by hardline Islamist attacks and the example of Egypt where the Muslim Brotherhood had taken charge.
With Tunisia dangerously polarised, and facing an economic crisis, Ennahda adopted moderate social positions and joined secular parties in a series of coalitions that tried to tackle public debt.
Party leaders believe those decisions helped avert unrest of the kind that accompanied the Brotherhood's rise and fall in Egypt, and economic disaster. But they also diluted its identity and tied it to unpopular government policies.
By 2014 Ennahda's share in the parliamentary election was down to 28%, with 947,000 votes, and last month its presidential candidate took only 12%, with 434,000 votes.
At al-Alia's weekly market, Ennahda was one of several parties to have set up a stall, blasting music and slogans from loudspeakers and handing out fliers.
One group of young men distributing election bumf were themselves former Ennahda voters, but were now standing for a new party focused on agricultural development.
Surrounded by fields and neat lines of olive trees, al-Alia is a farming district and its inhabitants see themselves as cut off from the wealth of the capital Tunis.
Hassan al-Majoubi, who voted for Ennahda in 2011, no longer supports it for economic reasons. "It did not keep its promises," he said.
When Zoubeir Choudi, a senior Ennahda leader, resigned last week and called for Ghannouchi to also step down, it pointed to the depth of its internal divisions.
Still, for all its troubles, Ennahda remains Tunisia's best-organised political movement, competing against an array of ever-changing, fly-by-night rivals.
It has a good chance of coming first in Sunday's parliamentary vote, with polls showing it and Karoui's Heart of Tunisia party with most support.
Ghannouchi, seeking to capitalise on the populist, outsider mood, last week swore to only enter coalition with other "revolutionary forces" after the election.
But depending on the outcome, he may have little choice but to again share power with secular parties in a government that will still face the difficult fiscal choices of recent years.
Voters like Amin, a strong believer in Islamist politics, have already abandoned Ennahda. He wants "an Islamic president who sticks to his principles".
Caught between the unpopular necessities of governance and the irrelevance of opposition, Ennahda stands little chance of winning him back. (Reporting By Mohammed Argoubi, Angus McDowall and Tarek Amara; Writing by Angus McDowall; Editing by Giles Elgood)