By Richard Lough
ANTANANARIVO (Reuters) - A rebel soldier declared himself head of Madagascar's army on Wednesday, ousting the general who had given the island's feuding leaders a three-day ultimatum to resolve the political crisis.
Army chief General Edmond Rasolomahandry had on Tuesday asked President Marc Ravalomanana and opposition leader Andry Rajoelina to unite within 72 hours to end weeks of troubles that have killed about 135 people and damaged the economy.
Senegalese President Abdoulaye Wade, who mediated in a previous political crisis in 2002 from which Ravalomanana emerged as president, said both he and Rajoelina had requested mediation, and invited the pair to peace talks in Senegal.
Colonel Noel Ndriarijoana, the mutineers' leader, appointed himself on Wednesday in the office of his predecessor, who walked out without comment, according a Reuters witness.
"Discussions proceeded without problems between brothers. From now on, the army is behind me," Ndriarijoana said.
The troops mutinied in anger at a crackdown by the government on demonstrations against Ravalomanana, but Rajoelina has distanced himself from them. The rebels also pressured the defence minister into resigning on Tuesday.
Local media quoted U.S. Ambassador Niels Marquardt as saying the Indian Ocean island nation was on "the verge of civil war."
The crisis has had a devastating impact on tourism, also suffering from the global financial crisis, and on hopes of bringing badly needed foreign mining and oil investment for the country of over 20 million.
Madagascar has opened its doors to multinationals including Rio Tinto and Sherritt International which are looking to extract cobalt, nickel and ilmenite -- a source of titanium dioxide used in paints.
FOREIGN ENVOYS WARN AGAINST COUP
Rajoelina, a 34-year-old one-time disc jockey, has galvanised widespread anger over the president's failure to alleviate poverty. He has repeatedly called on Ravalomanana to resign, saying he no longer controls the capital or provinces.
The government calls him a troublemaker and accuses him of whipping up public discontent with exaggerated claims.
Senegal's Wade said Rajoelina had requested his mediation last month and Ravalomanana made a similar request on Wednesday.
"Given the situation, which makes any on-the-spot mediation delicate, the President invites both parties to come to Dakar for negotiations leading to sustainable peace," Wade's Presidency said in a statement.
A group of foreign missions made clear they would suspend aid in the event of a coup d'etat.
"All non-democratic alternatives are not acceptable -- be it a coup d'etat, a military junta or the ongoing unrest," said Augustine Kasujja, the Vatican envoy, speaking on behalf of the diplomatic community.
"This will have seriously negative consequences for Madagascar's external relations with the outside world and for our capacity to support the country's development."
In a radio and TV address on Tuesday, Ravalomanana, a 59-year-old self-made millionaire who denies being a dictator, said he took responsibility for any mistakes he had made.
But for some Malagasy it was too late.
"The president has lost. I would say he is 90 percent likely to go. He's lost the army, no one knows who is control of what any more," said a hotel worker who did not want to be named.
(Additional reporting by Diadie Ba in Dakar; Writing by Helen Nyambura-Mwaura; Editing by Matthew Tostevin and Katie Nguyen)
