By Aziz El Yaakoubi

RABAT (Reuters) - Morocco's governing Islamist party opened its campaign for the kingdom's parliamentary election on Sunday, playing down tensions with the royal establishment.

The Oct. 7 ballot will be the second since the 2011 Arab Spring-like protests that prompted King Mohammed to introduce a new constitution to diffuse unrest and give the elected cabinet more powers.

While rulers in Libya, Tunisia and Egypt were felled by the 2011 protests, King Mohammed succeeded in stifling the protest movement by devolving some of his absolute power, spending heavily and tightening security, though the palace still holds ultimate authority.

The Islamist Justice and Development party (PJD) is looking to strengthen its position, though it is not openly challenging a royal establishment that is distrustful and ill at ease sharing power with Islamists.

"These are the signs of victory," Prime Minister and PJD leader Abdelilah Benkirane told thousands packed into a sports stadium in Rabat, where party supporters chanted against corruption, one of PJD's main policies.

"In 2011 the PJD said no, we won't risk our monarchy ... now all that instability has disappeared thanks to the reforms."

The elections will select lawmakers for the country's 395-seat House of Representatives. The prime minister will be selected by the king from the party that wins most seats, with PJD favorite to remain the dominant party.

Whoever wins, however, will then face weeks of wrangling to form a coalition with political partners to comply with election law that does not allow one party to take full control.

PJD's main rival, the Authenticity and Modernity Party (PAM), promises to fight Islamism and cancel what it says are unpopular reforms carried out by the PJD's coalition, mainly the pension system reform.

In an effort to calm recent tensions between the PJD and some in the royal establishment, Benkirane said that his party's five-year relationship with the monarchy has been one of cooperation rather than confrontation.

The PJD and its junior ally have accused the establishment of favoring their main rival PAM, the founder of which is now a palace adviser.

The palace says the king maintains the same distance from all political parties.

Rabat's mayor and PJD member Mohamed Sadiki said: "We have been working wisely and calmly and we will get the job done, without conflicts and without battling."

(Editing by David Goodman)