TOLUCA, Mexico -- Mexico's former ruling party bounced back from its first national election defeat in seven decades with a strong showing in the country's largest state ahead of historic mid-year congressional elections.

With nearly all of the votes counted Monday, the Institutional Revolutionary Party, or PRI, had outpaced President Vicente Fox's National Action Party in municipal and legislative elections in Mexico state, which nearly circles Mexico City.

Sunday's election in what may be Mexico's most representative state was widely seen as a preview for July 6 congressional elections, which will determine whether Fox faces a friendly or a hostile Congress for the final three years of his term.

Since taking office in December 2000, Fox has been hobbled by a Congress dominated by opposition parties.

A setback could mean that Fox's support for a U.S. attack on Iraq -- enormously unpopular according to recent polls -- would be politically risky for one of the most friendly Mexican administrations the United States has seen in decades.

On Sunday, more than 8 million voters were chose 124 mayors and 75 state lawmakers -- 45 directly, 30 according to vote percentages.

Almost-complete returns gave the PRI won 35 percent of district races for the state legislature and 34 percent of the municipal races, compared to 29 percent of legislative and 28 percent of municipal for National Action. The Democratic Revolution Party, which controls Mexico City's government, came in a close third.

The PRI won the state's governorship in 1999 but fell behind National Action in overall votes for the first time in history in the state's 2000 election.

PRI president Roberto Madrazo, whose party governed Mexico for 71 years before Fox's triumph in 2000, claimed "a very important victory." The state of 13 million people has an unusually varied urban-rural balance. It includes a dense ring of suburbs that mingle automobile factories, walled mansions and garbage-dump shanties as well as ox-plow farm villages, Indian communities and religious shrines.

Sunday's elections were relatively peaceful except in the farm towns of Juchitepec and San Salvador Atenco, outside of Mexico City.

In San Salvador Atenco, some 300 farmers, anarchists and students ripped apart voting booths to demand that charges be dropped against activists arrested during earlier protests that successfully blocked plans for a new Mexico City airport there.

In neighboring San Francisco Acuixcomic, people formed a human chain to protect voting booths, but protesters eventually stormed the village and destroyed all voting materials.

"People here want to vote, but these radicals won't let them," said Atenco resident Maria Janez. "Atenco is peaceful. Most of its people don't agree with what's happening."

Election officials annulled elections in Juchitepec, where protesters robbed ballot boxes and burned their contents, but it was unclear if they would take similar action in Atenco.