(Adds interior minister, U.N. statement, updates evacuee figures)

By Moumine Ngarmbassa

N'DJAMENA, Feb 3 (Reuters) - Troops loyal to Chad's president drove back rebels besieging his palace on Sunday, the government said, adding it had repulsed an assault by Sudanese forces in the east that it called "a declaration of war".

In the capital N'Djamena, government helicopters and tanks defended President Idriss Deby's fortified complex against rebels in pickup trucks mounted with machine guns who stormed into the city on Saturday.

Burnt-out vehicles and bodies lay in the streets of the capital after two days of confused street fighting in which charity Medecins Sans Frontieres estimated that several hundred people had been injured.

"The whole of N'Djamena is under control and these mercenaries in the pay of Sudan have been scattered," Interior Minister Ahmat Mahamat Bachir told French radio RFI. "The sun has gone down now, but the pursuit will continue tomorrow."

There was no independent confirmation of his remarks.

In the barren east of the country, rebels opened a new front in the conflict on Sunday with an attack on the town of Adre, near the border with Sudan's conflict-torn Darfur region.

Chad's army said it repulsed the ground and air attack by a mixed force of Sudanese army troops and rebels. Deby's Minister of State for Mines and Energy, General Mahamat Ali Abdallah Nassour, called the attack "a declaration of war" by Sudan.

Rebel spokesman Henchi Ordjo said Adre had been "liberated" and the northern town of Faya Largeau had also been captured. There was also no independent confirmation of this.

Sudan's government denied the accusation that it had backed the offensive by an alliance of Chadian insurgent groups, who denounce Deby's 18-year rule as corrupt and dictatorial.

The rebel assault, the second to hit the Chadian capital in two years, sent France and other foreign governments scrambling to evacuate their nationals from the oil-producing central African country, which has a history of wars and coups.

U.N. Secretary-General Ban Ki-moon called on Sunday for an end to fighting and the start of peace talks, while urging all countries in the region to respect each other's borders.

CITY CUT BY FIGHTING

Residents in N'Djamena said heavy weapons and machine gun fire erupted before dawn near the presidential palace, in the southwest of the city near the Chari river bordering Cameroon.

Widespread looting was reported across the city, as government forces fought back during the day using tanks and helicopters, cutting the city in two and leaving buildings smouldering and riddled with bullets holes.

Thousands of Chadians and foreigners fled from the fighting into Cameroon and Nigeria, authorities there said.

Rebels accuse former colonial ruler France of abetting the government by allowing army helicopters in N'Djamena to operate from the French military base, where they said it was sheltering Deby, a former French-trained pilot.

"Instead of evacuating him and rapidly establishing relations with us, France persists in backing Deby," rebel leader Timan Erdimi told French newspaper Journal du Dimanche.

A base spokeswoman told Reuters it was "totally false" the president was there. France has condemned the rebel assault, along with the African Union and the United States.

Its planes have evacuated more than 700 French and other foreigners to Gabon and were due to fly out hundreds more. Two French soldiers were slightly hurt while protecting foreign nationals, France Info radio reported.

Aid group Oxfam said it was pulling its international staff from N'Djamena and warned the fighting could hamper humanitarian efforts for half a million people displaced in eastern Chad.

Chadian officials accuse Khartoum of trying to sabotage the imminent deployment of a European Union peacekeeping force in eastern Chad tasked with protecting aid workers and tens of thousands of refugees spilling over from Darfur. (Additional reporting by Sudip Kar-Gupta in Paris, Opheera McDoom in Khartoum, Tansa Musa in Yaounde, Ibrahim Mshelizza in Maiduguri and Pascal Fletcher in Dakar; Writing by Pascal Fletcher; Editing by Caroline Drees)

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