(Adds government says UFDD destroyed, Irish vote on troops)

By Stephanie Hancock

N'DJAMENA, Nov 28 (Reuters) - Chadian rebels warned a European Union peacekeeping force bound for eastern Chad they would fight it as a foreign occupation army if it sided with President Idriss Deby.

The warning from the rebel Assembly of Forces for Change (RFC) followed the biggest battle in months in eastern Chad between Deby's forces and fighters from another major insurgent group, the Union of Forces for Democracy and Development (UFDD).

Both the UFDD and the government said their soldiers had killed hundreds of enemy combatants on Monday near the border with Sudan's Darfur region. The fighting shattered a month-old peace deal signed between Deby and his rebel foes.

The government said the army had on Wednesday tracked down and destroyed those UFDD elements which escaped Monday's battle.

"The survivors from this latest fighting were caught at Hadjer Marsaine and completely decimated ... As far as Chad is concerned the UFDD has been completely destroyed after the fighting at Hadjer Marsaine today," it said in a statement.

The UFDD and RFC rebel groups, allies in a 2-year-old eastern insurgency against Deby's 17-year rule, abandoned a ceasefire at the weekend and accused the government of not honouring parts of the Libyan-brokered peace accord.

Against the backdrop of this renewed conflict in east Chad, up to 3,700 EU peacekeepers are due to start deploying there early in 2008 on a mission to protect thousands of Sudanese and Chadian refugees, and foreign aid workers who care for them.

Irish Lieutenant-General Patrick Nash heads the EU protection force and Irish deputies approved on Wednesday sending 400 troops. Defence Minister Willie O'Dea said an advance detachment was expected to be deployed in December, with its main force likely to arrive in January or February.

RISKY DEPLOYMENT

Monday's battle stoked tensions between neighbours Chad and Sudan and highlighted the risks and sensitivity of the EU deployment, which will be the largest mission in Africa undertaken to date by the European bloc.

"If this force is coming to secure the refugee camps, then we see no problem," said RFC leader Timane Erdimi, a nephew and former close aide of the Chadian president who defected to join the eastern insurgency.

"But if they're coming to help Idriss Deby's regime, we'll consider them a foreign occupation force and we'll fight them," he told Reuters by satellite phone.

The UFDD rebels, led by another defector, former Defence Minister Mahamat Nouri, have also warned the planned EU force not to try to come between its fighters and the army.

Chad's government said Nouri had been chased over the border into Sudan in Wednesday's fighting at Hadjer Marsaine. Earlier he called on French radio for all-inclusive round table negotiations between the government and all its opponents.

Chad has summoned the Sudanese ambassador to deliver a protest that the UFDD rebels had attacked from Sudan.

Both governments have accused each other of supporting hostile armed groups.

Some analysts have questioned whether the EU force -- already delayed by a lack of troops and equipment -- will be able to avoid taking sides in eastern Chad, since almost half of its total strength is being provided by the French military, which has been assisting Deby under a bilateral defence accord.

The EU force commanders have pledged to remain neutral. (Additional reporting by Pascal Fletcher in Dakar, Jonathan Saul in Dublin; Writing by Pascal Fletcher; Editing by Nick Tattersall)

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