With rebels outside Chad's capital threatening more fighting in their bid to overthrow President Idriss Deby, one of the world's most unstable regions has got a whole lot more precarious. The implications could be dire - not only for hundreds of thousands of war-displaced but also for the Darfur conflict in neighbouring Sudan.

First there's the immediate crisis facing a flood of refugees who have fled N'Djamena following battles at the weekend that left the city's dusty streets littered with bodies.

UNHCR, the U.N. refugee agency, estimates that some 20,000 people have crossed the river border separating Chad with Cameroon since Saturday. As of Tuesday morning, the agency said frightened people were still crossing in a continuous stream.

Then there are the implications for the wider aid effort in Chad, where a steady flow of refugees from neighbouring conflicts has already put an impossible strain on resources in the semi-desert country.

About 240,000 Sudanese refugees live in eastern Chad, and some 60,000 refugees from Central African Republic live in the south. A spillover of violence from Darfur has also uprooted about 180,000 Chadians in the east, while another 100,000 have fled across the border to Sudan.

Chad and Sudan accuse each other of supporting rebel movements in their countries. Darfur rebels said on Tuesday they were engaged in Chad, fighting Sudanese army forces backing the rebels trying to oust Deby.

Sound complicated? The cross-border alliances may be tangled but the possible humanitarian impacts of the violence are clear. The instability has grounded aid flights, limited fuel supplies, choked the flow of relief funds and forced many aid groups to suspend operations.

"Everything's at stake," Gareth Owen, emergencies director for Save the Children, said by phone from the eastern town of Abeche. "If the aid operation has to stop for any reason, all those people, all those children and their families are going to suffer."

Abeche is the major aid hub in the east, but Owen said the whole humanitarian network in Chad depended on planes flying in and out of the capital.

Meanwhile, the rebel advance has forced the EU to suspend deployment of its 3,700-strong mission to protect civilians in eastern Chad. Analysts say the rebel attack on N'Djamena was timed to disrupt the peacekeeping operation.

The U.N. World Food programme says insecurity could disrupt food shipments for more than 400,000 displaced people, and any delay delivering food might also make it hard to get long-term supplies in place in time for the five-month rainy season that generally starts in June.

Aid agencies like CARE International and UNHCR have had to withdraw international staff and scale back or suspend operations. World Vision said its office in N'Djamena was attacked at the weekend, although staff were safe.

ALL-OUT WAR?

The third knock-on effect involves the Darfur crisis, now in its fifth year and looking more intractable than ever given the alarming situation in Chad.

Analysts say that if Deby's government falls, half a dozen Darfur rebel movements that are now sheltering in Chad may have to move back into western Sudan - and the balance of power could shift disastrously in Khartoum's favour.

Chad says Sudan is behind the latest assault on Deby's rule because it doesn't want the EU force to deploy on its border. Khartoum denies this and accuses Chad of aiding and abetting insurgents in Darfur, where at least 2.5 million people have been uprooted by violence.

"The implications of a change in government would be dire," Sudan watcher John Prendergast tells the Christian Science Monitor.

"The Khartoum regime would assume a dominant position in the region. The new government in Chad would join the Khartoum regime in a witch hunt for Darfurian rebels in Chad, thus removing any semblance of stalemate and inspiring Khartoum to ignore peace talks and pursue a military solution."

The international community is on Deby's side. The U.N. Security Council has urged countries to support Chad's government and France has said it could intervene against the rebels, who insist they'll only stop fighting if Deby quits.

"The situation in Chad is alarming because Chad has a legitimate government elected at the ballot box," French President Nicolas Sarkozy said on Monday.

But given the circumstances, one suspects world leaders are worried about more than just democracy. As one British aid worker tells Britain's Telegraph newspaper: "The question is whether what we are seeing now is the start of an all-out conflict between Chad and Sudan."

Reuters AlertNet is not responsible for the content of external websites.