* Yameen defeated favourite Nasheed with 51.4 pct of votes

* Vows to cut state spending, create jobs, opportunities

* Also calls for greater police powers, death penalty

By J.J. Robinson

MALE, Nov 17 (Reuters) - New Maldives President Abdulla Yameen pledged on Sunday to end two years of political turmoil that have brought violent protests to the holiday paradise, as he was sworn in after defeating the favourite Mohamed Nasheed in a run-off.

The win was a victory for the political old guard, who rallied around Yameen to defeat Nasheed, the Maldives' first democratically elected leader who was forced to resign last year in what he said was a coup.

The election was the fourth attempt to choose a new president after three earlier ballots were either cancelled or delayed, adding to tension between the rival political groups and drawing international condemnation.

Yameen won 51.4 percent of the votes in Saturday's ballot, in which 91 percent of the 240,000-strong electorate took part.

"Rising out of political turmoil and establishing peace is a big responsibility as Maldives' president and head of state," Yameen said in his inaugural speech, after he was sworn in at a special session of parliament.

Before his investiture, he also vowed to tackle the Indian Ocean nation's high levels of debt which leaves the Maldives vulnerable to external financial shocks.

"Today the Maldives is in a deep economic pit," he said.

"State debt is sky high. The state budget's expenses are extremely high. We have to prioritise by reducing state expenditure. I will start work very soon," he told a victory celebration.

In one potentially divisive move, he encouraged greater religious conservatism in the Muslim country during his campaign, including a form of sharia law.

He also called for enhanced police powers and implementation of the death penalty, which exists in the Maldives but is not carried out.

SETBACK FOR DEMOCRACY?

To supporters, 54-year-old Yameen is best qualified to steer the Maldives to economic prosperity, after he headed several state-run firms before launching a career in politics.

To detractors his victory is a blow to democracy and a step back towards autocratic rule.

Yameen is a half-brother of Maumoon Abdul Gayoom, who ruled for 30 years and is considered a dictator by rights groups and opponents. Key to his victory over Nasheed was the support of resort tycoon Gasim Ibrahim.

Gasim, a finance minister under Gayoom, was eliminated in the first round of voting on Nov. 9.

Yameen was sworn in before the country's Chief Justice Ahmed Faiz, with both Gayoom and Nasheed sitting next to each other in the audience.