DUBAI, Aug 9 (Reuters) - Mauritania's coup leader said his junta will continue to hold the deposed president for "security reasons" and urged allies and fellow Arab nations to show understanding to their position.

Mohamed Ould Abdel Aziz did not explain the security concerns preventing the release of Sidi Mohamed Ould Cheikh Abdallahi, but told Asharq al-Awsat newspaper in remarks published on Saturday that that the ousted leader was in good health.

"We will not release the deposed president at the time being for security reasons. We are now trying to make calm prevail and avoiding escalation," said Abdel Aziz, who toppled Abdallahi 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.

The African Union said on Saturday it would suspend Mauritania until democracy is restored there.

Abdel Aziz said his 11-man military junta "has no problems with France or America", when asked about international demands to reinstate the country's first democratically elected leader.

"We ask our Arab brothers and our friends to understand the position and we will share our reasons with them," he said. "The problem that happened in Mauritania is an internal affair."

"The deposed president toppled himself through a series of wrong steps that he made lately, hijacking the country away from the gains of democracy," he said, without giving details.

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.

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 in 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.

Abdel Aziz said that priorities of the 11-man military junta were "stabilisation and the revival of state's democratic institutions, fighting corruption and imposing justice".

Abdel Aziz declined to give a date for presidential elections "because we are working according to the country's priorities and the needs of the people that the former president had ignored for long".

The self-styled "High State Council" pledged on Thursday to hold a free presidential election as soon as possible.

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. (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/) (Reporting by Inal Ersan; Editing by Giles Elgood)

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