Anti-tank and automatic weapons fire was heard around the presidential palace, where Deby has been holed up since Friday. Bodies covered with flies littered the streets and aid groups reported hundreds of wounded from the fighting.

The rebels, who entered the capital on Saturday amid intense fighting, acknowledged that troops loyal to Deby had gained some ground. The city was calm late Sunday.

The offensive by three rebel commanders has opened up a new conflict next to Sudan's strife torn Darfur region and France suspended the deployment of a European peacekeeping mission in Chad and Central African Republic that it is meant to lead.

Chadian army helicopters attacked a rebel column near the national radio station headquarters in the capital. They also fired at other rebel vehicles in the city.

An army unit guarded the national radio but gave up after running out of ammunition. Rebels then moved in, but witnesses said they left and looters ransacked the building and left it ablaze.

The main Ndjamena market was also looted and torched after it was hit by a missile fired by an army helicopter chasing rebels, witnesses told AFP.

A rebel spokesman Abderaman Koulamallah acknowledged that "tanks have pushed us back a bit."

Government tanks blocked the main road to the presidential palace while French troops patrolled zones around five assembly points where hundreds of foreigners gathered, waiting to leave the country.

The French army said it had flown 580 foreigners out of Ndjamena, leaving about 320 to be taken out late Sunday and on Monday from an air base next to the main airport.

The rebels said however that they would now try to take Ndjamena airport.

"We did not take the airport so as not to hinder the evacuation of foreign nationals and now the French army is letting these helicopters take off and attack us," Koulamallah told AFP.

The United Nations said it would evacuate all its personnel and many US embassy staff were taken to the French military base on Sunday to be flown out, military sources said.

China, a major investor in Chad's growing oil industry, organised an airlift for 210 Chinese and two Taiwanese, China's official Xinhua news agency reported.

Germans, Belgians, Spanish, Portuguese, Egyptian and Armenian nationals were also airlifted out.

But Deby, who seized power at the head of a similar rebel force in 1990, refused a French offer to help him leave the country.

French President Nicolas Sarkozy broke off from celebrating his wedding to telephone Deby several times during the weekend and hold emergency meetings with ministers on events in the former French colony.

Sarkozy reaffirmed in his latest conversation with Deby on Sunday that France "strongly condemns" the rebel assault, a presidential spokesman in Paris said.

The African Union has also condemned the rebel offensive, while Senegal's President Abdoulaye Wade called the conflict "a failure for Africa".

No death toll from the fighting has been given but many bodies were left in the streets, some covered in flies some with plastic sheets put over them.

The Medecins sans Frontieres (MSF -- Doctors Without Borders) aid group said hundreds of civilians had been wounded, but it was unable to give a death toll. About 400 people had fled across the western border into Cameroon, according to the UN refugee agency.

The new fighting dashed hopes of a ceasefire which Libyan leader Moamer Kadhafi was reportedly trying to secure.

The rebel force in pickup trucks started moving across the desert from a base near the eastern border with Sudan on Monday but major fighting only erupted Friday as they neared the capital.

The Chad army's chief of staff, General Daoud Soumain, was killed in Friday's fighting, officials said.

French military sources said there were about 2,000 rebel fighters and that Deby has at least 2,000-3,000 troops.

The rebels were helped by Sudanese helicopters and Antonov military aircraft in an attack Sunday on the eastern town of Adre near the border with Darfur, the local government prefect, General Abadi Sair told AFP.

This was denied by a Sudan's state Minister for Foreign Affairs Sammani al-Wassila who called the Chad fighting an "internal affair".

Chad's Foreign Minister Amad Allam-Mi has accused Sudan of masterminding the rebel offensive in a bid to halt a planned European peacekeeping force (EUFOR) in Chad and Central African Republic to protect refugees mostly from Darfur.

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