(Adds Arab League reaction paragraphs 13-14)

By Opheera McDoom

KHARTOUM, May 11 (Reuters) - Sudan cut diplomatic relations with Chad on Sunday after an attack on the capital Khartoum by Darfur rebels which it said was supported by Chadian President Idriss Deby.

Rebels from Darfur's Justice and Equality Movement (JEM) fought Sudanese troops in a suburb of Khartoum on Saturday, in what one senior rebel commander called a bid for power.

"God willing we will take down Omar al-Bashir himself," Suleiman Sandal told Reuters early on Sunday. But since then there has been no word from the rebels.

Officials said the last rebel forces had fled on Sunday evening after bringing their battle to the capital for the first time in decades of conflict. Around 65 people were believed to have been killed in the clashes.

"These forces are all basically Chadian forces supported and prepared by Chad," President Omar Hassan al-Bashir said on state television. "We are now cutting our diplomatic relations with this regime."

Bashir said the fighters, who made a lightning advance across 600 km (400 miles) of desert and scrub to attack the western Omdurman suburb, were led by JEM leader Khalil Ibrahim, who is from the same tribe as Deby.

Chad has denied involvement, but analysts say it may have backed the JEM rebels to retaliate for an attack on the Chadian capital three months ago.

"It seems that at least in part this is payback for the NCP's (Sudan's ruling party) support for rebels in Chad who almost toppled the government there in February," said Amjad Atallah from the Save Darfur Coalition.

DARFUR CONFLICT

A senior government official said 70 JEM cars had entered Omdurman, just across the Nile from Khartoum, on Saturday. A security source said the army had engaged rebels west of Omdurman, killing 45 including a senior commander.

Khartoum's governor Abdel Haleem al-Mutafi said in total about 20 security forces had died.

"All rebel forces have now left the capital," Mutrif Siddig, the under-secretary at Sudan's Foreign Ministry, told Reuters on Sunday evening. A security source said rebels had retreated to some 70 km (45 miles) outside the city.

Siddig told the state news agency SUNA that Sudan would make a formal complaint to the U.N. Security Council about Chad. SUNA also said 300 suspected rebels had been arrested in the capital.

Arab foreign ministers said the attack on the capital was a "terrorist operation", an Arab League statement said.

The ministers "called on all states that support armed rebel movements to stop backing them or allowing them to use their territories to threaten the unity, security and stability of Sudan," the statement added in an apparent reference to Chad.

Rebels in the south, west and east of Sudan, Africa's biggest country, have for decades complained of neglect by the Arab-dominated central government.

A peace deal between north and south ended one civil war in 2005 and boosted Sudan's economy by increasing oil production in the south. But that agreement did not cover the conflict that erupted in the western region of Darfur five years ago.

International experts estimate some 200,000 people have died and 2.5 million been made homeless in Darfur since mostly non-Arab rebels took up arms against the government. Sudan puts the death toll at around 10,000.

Bashir Adam Rahman, political secretary of the opposition Popular Congress Party, said Saturday's fighting showed the government that "the war is coming to their backyard" and they must seize the chance for meaningful peace talks.

But government officials said the attack on Omdurman ruled the JEM out of any peace process.

AFTERMATH OF BATTLE

A curfew remained in force on the outskirts of Omdurman, as troops hunted down rebels. Military checkpoints remained at every major junction.

Heavy tanks lined Omdurman's streets and dozens of vehicles carrying armed men raced along. Security forces were arresting mostly young men who looked to be from Darfur.

Burnt out vehicles and broken glass littered some of Omdurman's main streets and remains of dead bodies could be seen. One mortar shell hit the minaret of a mosque. But the streets were again full of people.

State television showed a picture of JEM leader Ibrahim, branding him a war criminal. It called on citizens to pass on any information about his whereabouts and announced a $125,000 reward for information leading to his capture.

Siddig told Reuters that the Chadian embassy in Khartoum had been searched by security forces overnight.

"The contacts that have been monitored revealed that one of the points of contact for the rebel leadership was from within the Chadian embassy here in Khartoum," he said, later adding the security attache had been arrested.

Chad said it was surprised at Sudan's "hasty decision" to cut off ties and said it hoped they would be re-established.

Deby and Bashir signed a non-aggression pact in March. Each has accused the other of breaking the deal. (Additional reporting by Skye Wheeler in Juba and Andrew Heavens in Khartoum and Alaa Shahine in Cairo; Editing by Jon Boyle)

AlertNet news is provided by