By Tim Cocks and Ange Aboa
ABIDJAN (Reuters) - Terrified residents fled sporadic shooting in an Abidjan neighbourhood on Thursday and fighting erupted in Ivory Coast's west in an escalation of a post-poll power struggle that threatens to reignite civil war.
The spread of clashes in the world's top cocoa grower comes amid faltering diplomatic efforts to resolve a dispute between incumbent president Laurent Gbagbo and rival Alassane Ouattara, internationally recognised as the winner of a November election.
Over 300 people have been killed since then and worsening insecurity this week propelled cocoa futures to 30-year highs.
Hearing reports of pro-Gbagbo reinforcements going in, hundreds of residents, with bags piled on their heads, streamed out of Abidjan's Abobo neighbourhood, the scene of two days of fierce clashes between forces loyal to Gbagbo and Ouattara.
"We heard explosions and shots ... We were not able to sleep because of it, even when it stopped. We were too scared," said Akissi Konan, a 36-year-old mother of three on the road.
"We wanted to flee but we were scared to we waited until the sun rose before leaving the house," she added, clutching her youngest child to a sweat-soaked T-shirt.
People of all ages piled into vehicles leaving the pro-Ouattara neighbourhood, where houses and walls are peppered with small arms fire and, in places, destroyed by heavy weapons.
Gbagbo has rejected calls to step down despite U.N.-certified election results showing that Ouattara won the November 28 poll, which was meant to reunify the country but has instead re-opened bitter divisions from the 2002-3 war.
The economy has ground to a halt as sanctions bite.
Fighting broke out overnight in the west of the country, near the frontline between the two factions as well as the border with Guinea and Liberia, two nations trying to recover from their own instability and conflict.
"(The U.N.) thinks the clash poses a risk of armed conflict restarting ... which would have serious consequences for the Ivorian people and even the sub-region," said Hamadoun Toure, spokesman for the U.N. peacekeeping mission in Ivory Coast.
The New Forces rebels who still control the north and have backed Ouattara said they were attacked by pro-Gbagbo forces. There was no statement from the army and information on the toll from the clashes was conflicting.
SPORADIC FIRE
African presidents mandated to resolve the conflict were in Ivory Coast this week and are due to meet again soon in Mauritania to discuss the crisis, but there is little optimism that they will be able to broker a deal.
Clashes erupted in Abidjan as they started to leave town on Tuesday. A military source saying between 10 and 15 Gbagbo loyalists were killed in an ambush on Tuesday alone.
Tensions was high on Thursday.
"It is not calm. The army's armoured vehicles and soldiers are heading towards the railway and PK 18 (an area in Abobo)," said resident Tiemoko Souala.
"We are still hearing sporadic gunfire," he added
Ouattara is holed up in a hotel protected by U.N. peacekeepers but the rebels who have backed him are believed to have bolstered their presence in Abidjan, raising the stakes in a battle for the country's main commercial city.
West African regional body ECOWAS, which has been much stronger in its support for Ouattara than other parts of the continent, has threatened to oust Gbagbo by force but any such operation is seen as a long way off.
Nigeria's foreign minister told Reuters in an interview on Thursday that any intervention would need to be U.N. led and would be more likely to involve an aerial and naval blockade than deploying troops.
(Additional reporting by Loucoumane Coulibaly; writing by David Lewis; editing by Matthew Tostevin)
