Millions of South Koreans are casting ballots in a presidential election seen as too close to call.Park Geun-hye of the governing Saenuri party is looking to make history as South Korea's first female president.

But she faces a tough challenge from Moon Jae-in of the Democratic United Party, who has been steadily eroding her lead in the polls.Whoever wins will replace President Lee Myung-bak, who is stepping down, as the law requires, after his five-year term.Economic issues including welfare provision and job creation have dominated campaigning.'New era'

Polls opened at 06:00 (21:00GMT) and close 12 hours later. Three television stations will release joint exit polls when voting closes, with formal results expected early on Thursday.Three hours in, polling was brisk with turnout at 11.6% - up from 9.4% at the same point in the previous election, Yonhap news agency said.A national holiday has been declared so people can cast their ballots.

"Though it's cold today, I hope you will take part in the voting and open up a new era that every one of you has yearned for," Ms Park said after voting in Seoul.Park Geun-hye is the daughter of former military ruler General Park Chung-hee, a polarising figure credited with transforming South Korea into an economic success story during his 1961-1979 rule, but accused of ruthlessly crushing dissent.

Both Ms Park's parents were assassinated - her mother in 1974 by a pro-North Korea gunman and her father in 1979 by his own spy chief.Ms Park, 60, who in September apologised for human rights abuses during her father's era, said on Tuesday she would be "a president of the people's livelihoods, who thinks only about the people".

"I will restore the broken middle class and open an era in which the middle class make up 70% of the population," she said in a news conference at her party's headquarters in Seoul.Mr Moon, a former human rights lawyer, was once jailed for protesting against General Park's regime.  Mr Moon says if people want change they need to cast their ballotsHe was a chief of staff to Mr Lee's predecessor, Roh Moo-hyun, who killed himself in 2009 while under investigation for corruption.In his news conference, Mr Moon pointed to the current corruption and incompetency allegations surrounding Ms Park's own party.

"This overall crisis... will not be resolved by replacing the representative player. We must change the entire team," the 59-year-old said.Casting his ballot on Wednesday, he appealed for voters to turn out. "If you have been unsatisfied over the last five years, please change the world with your votes," he said.For all their differences, the two candidates have put forward remarkably similar policies, the BBC's Lucy Williamson in Seoul says.They have both promised to boost social welfare spending, close the gap between the rich and poor and rein in the country's family-run giantconglomerates, known as chaebol.

On the issue of North Korea, which has not featured heavily in the campaign despite its recent rocket launch, both candidates have promised more engagement with Pyongyang - though, in Ms Park's case, more cautiously than her rival.Our correspondent says the electorate appears to be more engaged than usual, with one recent poll suggested more than 80% of voters are planning to cast their ballotsSouth Korea uses a first-past-the-post system, and so the candidate with the most votes will become president.