BOUAKE, Ivory Coast, June 27 (Reuters) - Rebels controlling the north of Ivory Coast have handed back their final army prisoners, in the latest step under a home-grown peace plan to reunite the West African country after a 2002-2003 civil war.

Three Ivorian soldiers captured by the New Forces rebels two years ago were released during a closed-door ceremony on Tuesday attended by military commanders from both sides in the capital of the northern rebel zone, Bouake.

Their release paves the way for the formation of a new national army, incorporating rebel troops, foreseen in a March peace deal signed by President Laurent Gbagbo and New Forces leader Guillaume Soro in the Burkinabe capital Ouagadougou.

"It's time, high time, to prepare ourselves for the work of rebuilding our country," General Philip Mangou, chief of staff of the Ivory Coast National Armed Forces (FANCI), said after the release of the prisoners.

International Committee of the Red Cross officials observed the handover, which concluded a two-month process in which 60 rebels and 48 civilians have already been released.

"We can now say that there are no more prisoners of war," Antoine Gran of the Red Cross told Reuters.

The Ouagadougou agreement scheduled long-delayed elections for early 2008 but progress has been slow on key steps such as the identification and registration of voters in the divided former French colony, the world's largest cocoa exporter.

A U.N. Security Council delegation to Ivory Coast called this month on politicians to speed up implementation of the deal. They received assurances that the identification process would start in the coming weeks.

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