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* Niger seeks action, Algeria dialogue in Mali’s north

* Confusion prevails in northern zone abandoned by army

By Laurent Prieur

NOUAKCHOTT, April 8 (Reuters) – Sahara Desert states

differed on Sunday over whether to crush or talk to the rebels

who have seized northern Mali – a mix of Tuareg separatists and

Islamists with links to al Qaeda.

At a meeting of regional countries in Mauritania, Niger said

the rebels’ gains should be reversed before any talks, but

Algeria warned that military intervention risked further

complicating the situation.

The rebels, bolstered by guns and fighters from Libya’s war

last year, routed Malian troops, in disarray after a March 22

coup, to carve out a zone the size of France and declare an

independent state of “Azawad”.

Mali’s government had long had a weak hold over its northern

zone, but its neighbours now fear a void that will exacerbate

regional instability, terrorism and smuggling.

Mauritania, Algeria, Niger and Mali had set up a joint

military command headquarters before the lightning rebel push,

although it had struggled to coordinate efforts against what

they see as an Islamist threat in the Sahara.

Niger, which has suffered its own sporadic Tuareg

rebellions, said there could be discussion of some of the

demands of the separatist National Movement for the Liberation

of Azwad (MNLA).

But Foreign Minister Mohamed Bazoum echoed international

rejection of the group’s claim for independence as “absurd and

unacceptable”.

“We need to work to redress the balance of forces on the

ground before we can talk about negotiations,” Bazoum said at

the opening of the meeting in Mauritania’s capital, Nouakchott.

“We need to organise a confrontation with the terrorist

groups … Mali’s north must be cleared of terrorism and it

seems to me we have the ideal opportunity,” he said.

West Africa’s ECOWAS group had been mulling an intervention

to prevent any further rebel push until the coup meant restoring

civilian rule became the regional bloc’s priority.

The junta pledged on Saturday to leave power within days,

paving the way for the possibility for an intervention but it

remains unclear when boots could be put on the ground.

Bazoum said Niger, Mauritania and Algeria, as Mali’s closest

partners in the north, should engage in diplomacy but be ready

to intervene militarily, if needed.

Algeria, the region’s biggest power, took a different tack,

saying talks were the only way out. France, colonial ruler over

all the states at the table, has also pushed for dialogue with

the separatist rebel movement.

“The solution can only be a political one. It cannot be the

result of a military effort which could instead worsen an

already complex and precarious situation,” Mohamed Messahel,

Algeria’s delegate minister for African affairs, said.

Algeria’s position in Mali has been further complicated by

the kidnapping last week of its consul and six other staff from

its mission in Gao, one of the northern towns seized by rebels.

Algeria’s El Watan newspaper reported on its website on

Sunday that the diplomats had been freed, but Algerian officials

in Nouakchott were unable to confirm that.

Nearly a week after Malian government forces were completely

routed across the north, it remains unclear which groups really

control main towns or swathes of territory.

The MNLA separatists, which are more prominent in Gao than

the Islamists, denied any involvement in the kidnapping.

Ahead of the El Watan report that the diplomats had been

freed, French RFI radio said MUJWA, a splinter group from al

Qaeda’s North Africa wing, AQIM, had claimed the kidnapping.

(Writing and additional reporting by David Lewis; Editing by

Matthew Tostevin)