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DAR ES SALAAM, March 29 (Reuters) - African leaders named South Africa's President Thabo Mbeki on Thursday to facilitate dialogue between Zimbabwe President Robert Mugabe and his political opponents to resolve the country's deepening crisis.

A special summit of the Southern African Development Community (SADC) also called on the West to drop sanctions against Mugabe's government and appealed to Britain to "honour its commitments" to fund land reforms in its former colony.

"The extraordinary summit mandated his excellency President Thabo Mbeki to continue to facilitate dialogue between opposition and government and report back ... on progress," a statement at the end of the two-day summit said.

Tanzanian President Jakaya Kikwete, who hosted the summit amid growing Western calls for a tough line on Mugabe's most recent political crackdown, said the regional grouping appealed to all sides in the dispute to step back from the brink.

"Of course the appeal to parties is to be cooperative and give this initiative a chance, also for the parties to exercise restraint and avoid anything that's going to inflame the situation," he told reporters at a news conference.

The summit, attended by both Mugabe and Mbeki, satisfied longterm demands of Zimbabwe's government by calling on all sanctions against the country to be lifted.

The United States and the European Union have imposed "targeted" sanctions on Mugabe and his circle following a series of elections that the opposition says were rigged.

The southern African leaders also echoed Mugabe's frequent demand that London be held to vague commitments it made to assist with financing land reforms in Zimbabwe after it achieved independence in 1980.

"The extraordinary summit reiterated its appeal to Britain to honour its compensation obligations with regard to land reforms," the summit statement said.

Mugabe has repeatedly accused Britain of reneging on its promises and, in 2000, launched his own drive to forcibly seize white-owned farms to give to landless blacks -- launching the country on an economic and political downward spiral.

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