(Adds Arab League delegation arrival and quote)

By Daniel Magnowski and Hachem Sidi Salem

NOUAKCHOTT, Aug 8 (Reuters) - Mauritania's coup leaders have announced they will appoint a government to run the country until new elections, defying international demands to reinstate the first democratically elected president.

Soldiers in the northwest African country overthrew Sidi Mohamed Ould Cheikh Abdallahi on Wednesday after he tried to sack senior officers.

Abdallahi is being held at a secret location. His daughter, released from house arrest with the rest of his family late on Thursday, said he needed medical attention.

"His doctor visited him last night, and said he has to have a little operation, but it is not serious," she told Reuters after her release from house arrest, without giving details of the president's condition.

The only contact Abdallahi had been allowed with his family was a handwritten list, delivered by soldiers, in which he asked for antibiotics, clothes, books and aftershave, she said.

Mauritania spans Arab and black Africa and has been an ally of the United States in its fight against terrorism as al Qaeda has stepped up attacks in the region in recent years. The country is Africa's newest oil producer although production remains small.

Washington has joined international condemnation of Abdallahi's overthrow, demanding the restoration of his government and announcing the suspension on Thursday of non-humanitarian aid, worth more than $15 million of mostly military funding.

The European Union also threatened to cut aid. The United Nations and the African Union condemned the coup. An Arab League delegation arrived in Mauritania on a fact-finding mission.

"Stability is the message we bring," Ahmed Ben Hilli, its assistant secretary general for political affairs, told Reuters on Friday. "We don't want Mauritania to be isolated ... we want Mauritania to return to the fold."

NEW GOVERNMENT

Presidential guard chief Mohamed Ould Abdel Aziz, who launched Wednesday's coup after Abdallahi sacked him and other commanders, has formed an 11-man military junta.

The self-styled "High State Council" pledged on Thursday to hold a free presidential election as soon as possible, but gave no date. The Council appointed new regional military chiefs on Friday, further cementing its control of the administration.

In a separate statement published overnight by the state news agency, the junta said it would assume the powers of the president until the election and would appoint a government to rule the country in the meantime under Abdel Aziz's authority.

It said it would issue a constitutional decree in the coming days formalising the powers of the High State Council.

Other state institutions would continue to operate as normal, including parliament -- where the decision by a majority of pro-Abdallahi legislators to quit his party on Monday served as one of the main triggers for the coup.

Many of those legislators joined hundreds of people on a march through the capital on Thursday to support for the coup.

Police fired tear gas at small crowds who have held counter-demonstrations and a coalition called the National Front for the Defence of Democracy has been set up. "How can we believe the military will bring democracy?" said Jamil Mansour, an opposition politician whose party is part of the coalition.

Abdallahi won elections last year after a 2005 coup, also instigated by Abdel Aziz, which ended years of dictatorship, but he has faced growing opposition from parliamentarians who complain he has failed to consult them.

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