By Opheera McDoom

KHARTOUM (Reuters) - Counting started on Tuesday in a census seen as a vital step towards holding democratic elections in Sudan after a landmark 2005 north-south peace deal.

President Omar Hassan al-Bashir was the first person to be counted at midnight. The streets of the capital Khartoum were quiet on a national holiday after police told people to stay at home so they could be tallied.

No one underestimates the significance of the census. It is the first in Sudan since 1993 and is seen as a prerequisite for organising the first democratic elections in 23 years in 2009.

It will also be used to help determine the distribution of power and wealth, including proceeds from Sudan's half a million barrels per day of oil.

However, many Sudanese are sceptical results will be accurate and fear they may spark new disputes in Africa's largest country.

The south has reserved the right not to be bound by the results, saying millions of southerners displaced to the north during the war should go home first and that questions on ethnicity and religion be included.

The former north-south foes signed an accord three years ago creating a national coalition government and paving the way for democratic transformation. But progress has been slow, creating bad blood between the partners in peace.

The most recent U.N. estimate for Sudan's population is 37.8 million but the numbers are difficult to verify because of Sudan's huge internal displacement and also tens of thousands of Sudanese who have fled fighting over the years to neighbouring countries.

PROTESTS IN DARFUR

Victims of a separate five-year conflict in Sudan's western Darfur region also rejected the census saying they did not trust the government.

"No, no to the census," chanted demonstrating Darfuris in Darfur's most volatile Kalma camp.

"We have many demonstrations today in the camps against the census," Darfur IDP leader Abu Sherati told Reuters by phone. He said Darfuris in six of the largest camps were protesting.

"We don't have any trust at all in this government so we reject the census completely," he added.

The United Nations advising the government carrying out the census says that while 34 percent of Darfur camps and 19 percent of localities were likely to be inaccessible because of security problems or a refusal to take part, they could still extrapolate their numbers using technical methods.

The census is highly politicised as Sudan's multiple civil wars have all been caused by marginalised regions demanding more rights from the central northern Nilotic tribes who have dominated power since independence from the British in 1956.

Religion, a question which was not included in the census angering the mostly Christian or animist southerners, also played a major role in the war.

Islamic sharia law was imposed in Sudan in 1983 fuelling the north-south conflict. It was lifted in the south with the 2005 deal although southerners can still use sharia courts if they wish.

The census will continue for two weeks with final results not expected before September.

(Editing by Keith Weir)