KHARTOUM, April 26 (Reuters) - Sudan will release 100,000 tonnes of cereals bound for the troubled Darfur region after holding it in Port Sudan for checks, the United Nations food agency said on Thursday.

The World Food Programme (WFP) said on Wednesday Sudan was holding the aid on the basis it was genetically modified, a charge the WFP has strongly denied.

"There had been a temporary hold on the release, which sometimes happens in order for the fitness of the commodities to be confirmed," Kenro Oshidari, the WFP representative in Sudan said in a statement.

"The matter has been resolved to the satisfaction of all parties concerned and the food released for delivery to the beneficiaries."

Sources in the aid community said Sudan was blocking the shipment because it wanted the WFP to buy local food products.

Sudan has said it checks aid shipments arriving in the country fearing they could be genetically modified because of the government's concern for people's safety.

The United Nations estimates around 200,000 people have been killed in the vast western region and 2.5 million displaced since 2003, when rebel groups took up arms against the government, accusing it of neglect.

Human rights groups say the Sudanese government armed Arab militias to help quell the rebellion. Khartoum denies the charges and says only 9,000 have died in the conflict.

The WFP's new head, Josette Sheeran, began a visit to Sudan on Wednesday, her first field trip as executive director of the agency. Sheeran is a former undersecretary for economic affairs at the U.S. State Department.

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