January 21, 2011 10:13:42 PM
* Odinga says "window closing fast"
* AU unity at stake before end-of-month summit
* State oil firm concerned sanctions could hurt (Adds U.N. vehicles dispute, paragraphs 10-12)
By Wangui Kanina and Ange Aboa
NAIROBI/ABIDJAN, Jan 21 (Reuters) - Time is running out for a peaceful settlement of Ivory Coast's crisis, Kenyan premier Raila Odinga said on Friday after leading a failed African Union mediation bid, adding that force was a "last resort."
Ivorian incumbent Laurent Gbagbo has defied calls to quit after U.N.-certified results showed him the loser of a Nov. 28 election, prolonging a stand-off with rival Alassane Ouattara that risks throwing the top cocoa grower back into civil war.
"The window for a peaceful negotiation is closing very fast," Odinga told reporters on returning to Kenya.
"We will continue to walk the extra mile to find a peaceful resolution ... The use of legitimate force is there and we will say that it is the ultimate resort, the very last resort if everything else has failed," he added.
There is little appetite among African nations for armed intervention that could cause more bloodshed in a country where 260 have already died in violence linked to the deadlock. Nations such as Ghana say they will not offer troops.
Leaders of the 53-state African Union will discuss next steps at a summit at the end of the month, and signs are emerging of cracks in an official AU line insisting that Gbagbo immediately make way for Ouattara to take power.
Odinga made a detour to Angola and South Africa on the way back to Kenya, holding talks with the leadership of two states seen as potential weak points in AU unity.
South African President Jacob Zuma said there were "some discrepancies" in the election result and dismissed a proposal by diplomats for Gbagbo to go into exile.
Odinga said a recount, suggested by Gbagbo, would be pointless. "I told Gbagbo and the two presidents that it is an exercise in futility. Even if you are to open the ballot boxes and do a recount, no one would believe you," he said.
Sparking new tension with the United Nations, which has defied a Gbagbo order for its 10,000 peacekeepers to leave the country, the Ivorian army said its forces were under instructions to stop and search vehicles with U.N. markings.
Army spokesman Colonel Babri Gohourou linked the order with allegations -- dismissed by the U.N. peacekeeping department -- that 2,000 U.N. troops had joined forces with rebels controlling the north and were preparing to attack civilians.
U.N. spokesman Martin Nesirky said the stop-and-search order was a "serious violation" of an agreement between the Ivorian government and the world body, and of Security Council resolutions, and was "therefore unacceptable."
NEW COCOA HIGHS
Cocoa futures hit eight-and-a-half month highs on concerns of possible supply disruptions in Ivory Coast, which supplies around a third of the world's market.
Gbagbo's camp has brushed off international efforts to limit its funding and so far appears to be retaining control of the bulk of revenues from cocoa and oil production.
However in early signs that the funds squeeze could start to hurt, state oil company Petroci told Reuters it feared that an EU funding and asset freeze imposed on it at the weekend could damage the 40,000-barrel-a-day sector within a matter of months.
"We must be realistic. We have to admit that two, three, six months down the line, these sanctions could have an impact ... It exposes us to what could be a slow disintegration," Petroci director Fadika Kassoum said in an interview.
Of Ivory Coast's cash-strapped SIR oil refinery -- in which Petroci has a minority stake and which supplies much of the region -- he warned the measures could deprive it of the funds needed to buy in crude oil.
"I think from March onwards, SIR is going to find itself in trouble and will have to stop its activities. We're not kidding ourselves," he warned.
A new attempt will be made to starve Gbagbo of funds when leaders of the West African single currency zone meet in Mali on Saturday, with Ouattara allies insisting Gbagbo's camp be denied all access to Ivorian funds held at the BCEAO regional bank.
Ouattara complained in a Reuters interview on Thursday that Gbagbo had tapped some 100 billion CFA francs ($200 million) from Ivorian accounts at the bank despite regional recognition that Ouattara won the election. (Additional reporting by Patrick Worsnip at the United Nations; Writing by Mark John; Editing by Vicki Allen)
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