LIMA, July 26 (Reuters) - An opposition-led alliance won a vote on Monday to lead Peru"s Congress, a setback for socialist President-elect Pedro Castillo on the eve of his inauguration and a sign of challenges ahead to his plans to reform the constitution and hike mining taxes. A leadership team headed by centrist legislator María del Carmen Alva from the Popular Action party won by 69 to 10 votes against a rival grouping led by retired military man Jorge Montoya from an ultra-conservative right-wing party. A list of candidates proposed by Castillo"s Free Peru party was rejected over procedural issues, underscoring challenges the outsider president-elect faces pushing through reform in a fragmented legislature where no single party has a majority. Alva, who will be Congress president for the 2021-2022 legislative period, had support from the right-wing Popular Force party of Keiko Fujimori, who narrowly lost to Castillo in a knife-edge June 6 run-off and has pledged to fight him. "Congress will guarantee the balance of powers that the country needs," Alva said in a speech after the vote, adding she was open to working with the government "within the framework of a respectful dialogue". "Let"s end the conflict between the powers," she said. Castillo gained strong support from poorer, rural Peruvians on a platform pledging to redraft the Andean country"s decades-old constitution and sharply raise taxes on copper mining firms to pay for reforms in healthcare and education. The rise of the former teacher and son of peasant farmers has, however, rattled Peru"s political and business elite, despite moves by Castillo to distance himself from hard left regimes in the region and bring on more moderate advisers. On Sunday Castillo announced a list of candidates to lead Congress picked from allied parties rather than his own to support the "governance" of the country, though the list was rejected as one candidate was not properly registered. Castillo, 51, will be sworn in as president in Congress on Wednesday, when Peru celebrates its bicentennial of independence. He is expected to give his first address as president, laying out his government"s plan for 2021-2026. MILITARY TENSION, PARTY SPLITS Analysts also say Castillo is facing potential friction within his own party and with some factions within Peru"s Armed Forces due to the perception from some that he could politicize the institution. The head of the joint command of Peru"s Armed Forces, General César Astudillo, presented a request over the weekend to step down early, two army sources told Reuters confirming local reports, which would see him leave before the inauguration. "Within the army, his view about the new government was well-known," security expert Pedro Yaranga said. "He prefers to step aside before there are changes in the Armed Forces and the police." Astudillo has yet to comment publicly on the request to step down. Castillo has not commented on the potential departure. The president-elect must also resolve discrepancies within his Free Peru party, with more far-left legislators including Marxist party leader Vladimir Cerrón pledging to battle for a new constitution, despite a lack of support in Congress. "Compatriots, revolution is never made within official parliaments, the revolution is made in unofficial parliaments, on the street, with grassroots organizations," Cerrón said with a raised hand during a party meeting on Saturday. The speech ended with an standing ovation from supporters who had come from poorer regions of Peru. "A new constitution or death," they shouted several times.