Madagascar's president defies resignation demands

ANTANANARIVO (Reuters) - Madagascar's President Marc Ravalomanana defied an opposition demand on Saturday to resign and end a political crisis on the Indian Ocean island that has killed more than 135 people this year.

The president of the Indian Ocean island is under growing pressure. Some dissident soldiers said this week Ravalomanana should go and a former prime minister defected to the opposition on Saturday, saying his former close ally should resign.

Opposition leader Andry Rajoelina emerged from hiding to tell thousands of his supporters in the capital's central square he was giving Ravalomanana four hours to quit.

Less than an hour after the deadline passed, Ravalomanana came out of his presidential palace to talk to thousands of his own supporters blocking the road from the city centre.

"Yes, of course I'm still the president," he told Reuters. "No, I will not be resigning in the next 24 hours."

The political crisis has been running since the beginning of the year, damaging Madagascar's image as a destination for foreign investment and crippling the island's $390 million a year tourist industry.

Rajoelina, 34, a former disc jockey, had been under U.N. protection since fleeing attempts to arrest him last week. He calls the president a dictator and has tapped into deep public resentment at Ravalomanana's failure to tackle poverty.

Ravalomanana's supporters said they were happy the president had told them he was staying, but were wary of the army.

"He told us he would remain president until the end of his mandate," said Alain Rakotonoily, a tour guide. "This won't solve it. Now we have to watch the armed forces. We will stay here through the night to protect the president."

Madagascar's traditionally neutral military is increasingly looking to be the arbiter of power. It has refrained from intervening in the crisis so far -- despite a widening mutiny.

Dissident soldiers said they had hidden tanks in the capital as a precaution to fight any mercenaries hired in the struggle, but said they were not taking orders from the opposition.

DEFECTION

Flanked by tight security, Rajoelina made a "V" for victory sign before issuing his ultimatum to the supporters thronging the square that has been the epicentre of previous uprisings.

He told the rally he was ready for a democratic handover and would go to the presidential palace to bid Ravalomanana goodbye, but did not want to go with tanks and soldiers.

Jacques Sylla, a former prime minister and close ally of the president during the 2002 crisis that brought him to power following disputed elections, defected to the opposition.

An aide to Rajoelina said after the deadline had passed that they were still waiting for the president to quit, and that "something will happen" if he refuses to step aside.

Earlier, opposition members seized control of the prime minister's office, declared they had assumed the powers of the presidency and pledged to hold elections within two years.

An aide to the president said the opposition had no legal authority and that Ravalomanana remained in his palace.

"This is and remains until now a street protest, using fear and repression to survive," the aide, who declined to be named, said. "It is unclear right now whether the whole of the army is behind the opposition."

The president said later the solution was national dialogue.

There was a heavy military presence on the streets on Saturday, but the opposition rally passed off peacefully. Several opposition demonstrations have ended in violence after the security forces stepped in.

European Union mission head Jean-Claude Boidin told Reuters any "non-constitutional" solution to the political impasse -- meaning a coup -- would lead to a suspension of aid.

Madagascar's capital, a city of faded French grandeur perched on steep slopes, is one of Africa's poorest where many live without electricity or running water and eke out a grim existence on less than $2 a day.

Caught in the middle of the crisis is an increasingly weary population. Some fear a Rajoelina takeover would not be the end.

"It's not over yet. The U.N. won't accept this because the president's mandate still has three years to run. Nor will the president accept easily," said student Sitraka Andriananson.

(Writing by David Clarke; Editing by Alison Williams)