ABIDJAN -- Ivory Coast appeared on Friday to be slipping a step closer the kind of anarchic conflict which has ruined other struggling African states after a new rebel force sprang up and suddenly seized two western towns.

The West African country, the world's biggest cocoa producer, is cut in three -- the south under loyalist control, the north held by rebels for more than two months and a chunk of the west now in the hands of other insurgents.

Addressing soldiers at the army headquarters in the main city of Abidjan, President Laurent Gbagbo said the armed forces would move swiftly to drive out the fighters who took over the towns of Danane and Man on Thursday.

"All the necessary measures have been taken to achieve that. We are going to join battle," Gbagbo said. "They are trying to invade the cocoa growing region to upset the economy ... Ivorians should remain calm. We will win."

Residents of Danane and Man, more than 600-km (400 miles) from Abidjan near the edge of the cocoa belt, said young rebels in scruffy clothes cruised the streets in stolen pickup trucks, firing in the air. There was no clear idea of casualties.

The fighting on Thursday coincided with a government attack, backed by foreign mercenaries, on rebels holding most of the north of the country since a failed coup on September 19 began the former French colony's worst crisis.

The army had accused the Patriotic Movement of Ivory Coast (MPCI) rebels of breaking a six-week-old truce on Wednesday.

Gbagbo's adviser in Europe dismissed the newly emerged rebels as covers for the MPCI. He said two groups had been identified -- the movement for justice and peace and another band saying it represented the interests of western Ivory Coast.

"As long as the MPCI and its surrogates continue to provoke us, we will pursue the offensive," Toussaint Alain told Reuters.

--- Threat to Region --- Hundreds died in four weeks of bloodshed before the French-monitored cease-fire was agreed. West African countries are desperately trying to patch together a peace deal at talks in Togo to stem a crisis threatening regional chaos.

So far, there is little clear progress and mediators rejected the latest rebel peace proposals late on Thursday.

Mediators have ruled out the rebel demand for a "new political order" that would mean removing Gbagbo.

"I can confirm that the proposals were rejected," rebel spokesman Konate Sidiki told Reuters.

The main rebel group holds the mostly Muslim northern half of the country and accused Gbagbo of encouraging ethnic discrimination. It wants the president -- a Christian from the southwest -- to step down to allow new elections.

The newborn Movement for Justice and Peace is linked to late junta leader Robert Guei, who ruled for 10 months after a 1999 coup and was shot dead along with his wife by loyalists on the day of the failed putsch. Guei was from the west.

"We are in danger of a Liberia-type scenario here," said one African diplomat, referring to the years of tribal-based faction war that tore apart Ivory Coast's neighbor in the 1990s and left a legacy of lingering conflict.

For decades after independence in 1960, Ivory Coast was a model of stability in the fragile region, but tension among dozens of tribes grew steadily after the death of founding president Felix Houphouet-Boigny in 1993.

The government rejects rebel accusations of discrimination and says the insurgents are power-hungry army deserters in the pocket of neighboring states.

The French mission observing the truce said a loyalist force rolled across the cease-fire line to within 12-km (eight miles) of the MPCI-held town of Vavoua on Thursday before stopping their advance before dark.

Lieutenant-Colonel Ange-Antoine Leccia said up to 200 mercenaries were with the force -- largely English-speaking black soldiers with a few whites. Most Ivorians speak French.

Ivory Coast has denied getting mercenary help, but regional military sources say it recruited dozens of South Africans and some French to beat back the rebels.