By Abdoulaye Massalatchi

NIAMEY, May 3 (Reuters) - Libya will invest 100 million euros ($155 million) to build a trans-Saharan highway in Niger under accords signed between the neighbours, whose ties had been strained by a Tuareg revolt, officials said on Saturday.

Prime ministers from the two countries agreed to expand cooperation during talks in Niger's capital Niamey on Friday. The deals signed also foresaw Libyan investments in shoe and textile manufacturing and an irrigation project in Niger.

Relations between Niamey and Tripoli had cooled after President Mamadou Tandja's government accused northern neighbour Libya last year of supporting a rebellion by Tuareg-led rebels in Niger's northern, uranium-producing region of Agadez.

The Niger Justice Movement (MNJ) has been fighting for more than a year against the central government to press for more autonomy and a greater share of the wealth of the uranium-rich north. MNJ fighters have killed at least 70 soldiers, taken dozens hostage and ambushed convoys.

Niger's government, which often calls the MNJ arms- and drug-smuggling bandits, has asked Libyan leader Muammar Gaddafi to help persuade the MNJ fighters to lay down their arms.

"I've received instructions from the Libyan Guide (Gaddafi) to do everything possible to strengthen bilateral cooperation. Niger is already Libya's first partner and this cooperation, I can assure you, will intensify," Libyan Prime Minister al-Baghdadi Ali al-Mahmoudi said after talks with his Niger counterpart Seini Oumarou.

Gaddafi has long been an advocate of autonomy for the nomadic Tuareg people of the Sahara.

The trans-Saharan highway to be financed by Libya in Niger will run from Agadez to Bilma and then to Toummo on the Libyan border. Other accords signed sought to improve trade, transport and air links between the neighbours.

Niger, a landlocked former French colony, is one of the world's top producers of uranium, which is used to fuel nuclear reactors and can also serve to manufacture nuclear weapons. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/) (Editing by Pascal Fletcher)

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