ALGIERS, Feb 3 (Reuters) - Algeria said on Saturday its cooperation with Washington's war on terrorism was "profitable" but it would never agree to host a U.S. military base on its territory.

The United States has conducted joint training exercises in countries around the Sahel as part of the "Trans-Saharan Counter Terrorism Initiative" to counter militancy in the region.

And it has reinforced military cooperation and intelligence sharing with Algeria, an OPEC member itself emerging from more than a decade of an Islamic uprising, igniting rumours in the Algerian media that Washington would like to set up a military base in the country.

This month, President George W. Bush also authorised the creation of a new Africa Command, under which future African continental operations would be conducted.

"I can confirm that Algeria has a fruitful cooperation with the United States in the fight against terrorism. Both sides see it as profitable for the security of the two countries as well as for other countries," Ministry of Foreign Affairs Mohamed Bedjaoui told state radio.

"The Algerian territory is absolutely not concerned by the implementation of the American African command ... To be clear, Algeria will never accept a foreign military base on its land."

Violence in Algeria broke out in 1992 after the then military-backed authorities, fearing an Iran-style revolution, scrapped a parliamentary election that an Islamist political party, the Islamic Salvation Front, was set to win.

Up to 200,000 people were killed in the ensuing bloodshed.

The violence has subsided sharply in recent years but Al Qaeda Organisation in the Islamic Maghreb, previously known as the Salafist Group for Preaching and Combat, is still claiming responsibility for attacks. The country was hit by a chain of bombings in January and February.

The group changed its name in January after it said it received approval from Osama bin Laden.

Analysts in the region say there are signs of increasing cooperation between Islamist militants groups across national borders.

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