(Adds Libya comment, paragraphs 12-14, Rice leaves 15)

By Sue Pleming

RABAT, Sept 7 (Reuters) - U.S. Secretary of State Condoleezza Rice urged a resolution of the Western Sahara dispute on Sunday, saying she saw "good ideas" for solving an impasse that has long held back north Africa's development.

Rice, ending a regional tour that included a meeting with Libyan leader Muammar Gaddafi in Tripoli, said on a visit to staunch ally Morocco that further mediation could help end Africa's oldest territorial disagreement.

"It is time that it be resolved," she told reporters after talks in Rabat with Moroccan officials on issues including the decades-old dispute between Morocco and the Algerian-backed Polisario Front independence movement.

"There will be a new round of talks soon. We are going to support that round, that mediation, there are good ideas on the table and there are ways to move forward."

"We don't need to start over. I hope that we can move forward and get this resolved."

The dispute over Western Sahara, which is rich in phosphates and fisheries and potentially has offshore oil, has poisoned relations between Morocco and Algeria and blocked badly-needed economic cooperation and growth in north Africa.

The issue also has divided the Security Council, with France and the United States backing Morocco but South Africa and others favoring Polisario. Washington wants Sahara's status resolved so regional states can focus on what it sees as the more important question of combating terrorism.

U.N.-brokered mediation has failed to break a deadlock over whether the territory should be an autonomous region of Morocco, as Rabat proposes, or have a referendum of its people to decide whether or not it should be independent, as Polisario wants.

Peter Van Walsum, the mediator who led the slow-moving talks since June 2007, left his job last month after angering Polisario by making comments that appeared to favour Morocco. U.N. officials in New York have said he will be replaced.

Algeria is the principal ally of Polisario and site of its headquarters. Like many African states, Algeria opposes Moroccan control of the territory and sees it as Africa's last colony.

COUNTER-TERROR COOPERATION

Polisario waged a low-level guerrilla war in Western Sahara from 1975 until 1991, when the United Nations brokered a truce.

On Friday Rice made the first trip by a U.S. secretary of state to Libya in 55 years, a move intended to end decades of enmity following the signing of a compensation package to cover legal claims involving victims of U.S. and Libyan bombings.

"The breakthrough in relations with Libya enables the U.S. to have a Maghreb policy," said Rice, who is making her first tour of north Africa.

"I heard in Tunisia, Algeria and Morocco as well in Libya how many challenges and opportunities there are in the region."

Many regional commentators have said U.S. policy towards north Africa has lacked coherence, disjointed by Washington's longstanding preoccupation with Libya.

Rice, who later left for Washington, also lauded close ties between Morocco and the United States and said: "I can think of no better way to end my trip."

She reiterated that Washington needed close counter-terror cooperation in the region, which is periodically hit by violence blamed on al Qaeda. An estimated 125 people were killed in a surge of violence in Algeria in August in attacks by al Qaeda's north Africa wing and clashes between the army and militants. (Additional reporting by Lamine Ghanmi) (Reporting by Sue Pleming, Writing by William Maclean, Editing by Diana Abdallah)

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