By Marc Frank

HAVANA (Reuters) - Opponents of the Cuban government are putting forward an unprecedented number of candidates for municipal elections in late October, the first step in a process to select a new president after nearly 60 years of the Castro brothers' rule.

The electoral cycle comes at a tricky time for the Caribbean nation as the Castros' revolutionary generation dies off, an economic reform program appears stalled, aid from key ally Venezuela shrinks, and the Trump administration threatens.

The municipal vote, the only part of the electoral process with direct participation by ordinary Cubans, is expected to attract 35,000 candidates for the island's 168 municipal assemblies. It will be followed by provincial and national assembly elections in which candidates are selected from slates by commissions.

The new national assembly will in late February select a successor to President Raul Castro, 86, who has announced he will step aside after two terms.

Raul, younger brother and successor to Fidel Castro who died in November, will retain a grip on power as head of the Communist Party, the only legal party in Cuba.

The elections are being cast in state-run media as a show of support for the Castros' 1959 revolution rather than an opportunity to debate the pressing issues.

Campaigning is prohibited and candidates for the 12,515 ward delegate positions are nominated at neighborhood meetings based on their personal merits, not policy positions. They need not belong to the Communist Party and many candidates are independents but only few government opponents have ever competed.

During the last election, the three dissidents nominated lost at the polls.

This year, however, one coalition of opposition groups, Otro18 (Other18), says it is running more than 160 candidates in the municipal elections, demanding electoral reform and government transparency.

"This is unheard of," said Boris Gonzalez, 41, one of the aspiring Otro18 candidates, explaining they wanted to challenge the Communist Party from within the system.

Otro18 spokesman Manuel Cuesta Morua said in an interview that its candidates had faced harassment and threats by state security forces for months and had been warned not to participate. The government has not responded to these accusations.

The Communist Party says it does not intervene in the elections, but a video circulating on social media of First Vice President Miguel Diaz-Canel, Raul Castro's probable successor, suggested otherwise.

"There are six initiatives for the 2018 elections that seek to propose counter-revolutionaries as candidates," Diaz-Canel told Communist Party cadres in the video. "We are taking steps to discredit all that."

"In this battle, which we are already fighting, we are going to be involved in this whole process in the second half of the year," he said.

Photos: U.S., Cuban Relations Over the Years View All 10 Images

The government has not commented on the video. Cuba brands all dissenters as mercenaries funded by foreign governments and exiles, out to topple the government.

Even if a few dissident candidates beat the odds and are elected to municipal assemblies, they have little chance of getting any further.

The candidates for the provincial and national assemblies are nominated by commissions composed of representatives of Communist Party-controlled organizations such as the trade union federation and Committees in Defense of the Revolution.

The slates have had the same number of names as seats in previous elections. Up to 50 percent of those names must be ward delegates.

After the general election, the assemblies elect their respective executives and on Feb. 24 the new National Assembly is scheduled to name a new president and other members of the Council of State.

"I have never voted for anyone important, not even our president," said retired air force mechanic and staunch Castro-supporter Eduardo, who requested his last name not be used.

"I can only vote for my neighborhood representative and they never go anywhere," he said, "but I still think it's a better system than one based on money and lies."

(Additional Reporting by Nelson Acosta; Editing by Richard Chang)