NAYPYITAW, Mar. 25 (Reuters) - Military-ruled Myanmar plans to have an election if there is peace and stability in the country but may not be able to hold it nationwide, its top general said, as the junta battles to contain a rebellion on multiple fronts.

The military, which has been in power since a coup three years ago, still planned to return the country to democratic rule, junta chief Min Aung Hlaing told Russia's Tass news agency, according to a transcript of an interview carried by Myanmar's state media.

The generals are facing their biggest challenge since first taking power in the former British colony in 1962, with a youth-led pro-democracy uprising morphing into an armed resistance movement after a lethal crackdown on a wave of protests.

The military has been fighting a resurgence of some of its oldest battles with ethnic minority armies in northern and eastern Myanmar and has been accused by opponents of committing systematic atrocities, which it denies.

"If the state is peaceful and stable, we have a plan to hold the election in relevant sections as much as we can even if the election is not held nationwide under the law," Min Aung Hlaing was quoted as saying.

The junta has repeatedly extended emergency rule every six months, citing the need to stabilise the country and crush its opponents, which it describes as terrorists.

It has deployed heavy artillery and fighter jets to try to suppress militias allied with a shadow government and ethnic minority insurgents, with more than 2.3 million people displaced since unrest in the wake of the coup, according to the United Nations.

Critics and Western countries have said Myanmar's election would be a sham, with more than 40 parties dissolved since the coup and prohibitive rules making it difficult for new ones to form or challenge proxies of the military.