UNITED NATIONS, April 14 (Reuters) - The U.N. Security Council should press Western Sahara's independence movement and Morocco to resume negotiations on the future of the territory, the U.N. chief said in a new report released on Tuesday.

U.N.-mediated talks over the territory began two years ago but have been deadlocked over whether Western Sahara should be an autonomous part of Morocco, as Rabat proposes, or hold a referendum on whether to secede, as Western Sahara's Algerian-backed Polisario independence movement wants.

"I recommend that the Security Council reiterate its call on the parties ... to negotiate in good faith, without any preconditions, and to show political will to enter into substantive discussions and ensure the success of the negotiations," U.N.Secretary-General Ban Ki-moon said.

In his latest report to the Security Council, Ban said that "little has changed" since the last unsuccessful round of talks between the two sides last year, though Polisario and Moroccan negotiators had indicated they would be willing to meet informally to explore how formal talks could be resumed.

Ban also asked the 15-nation Security Council to extend the mandate of a military observer mission to Western Sahara, known as MINURSO, for another year until April 30, 2010.

The council is scheduled to discuss Western Sahara and MINURSO next week.

Tensions between Polisario and Morocco have been escalating recently. Polisario rejected on Monday a Moroccan charge that it had violated a ceasefire with a demonstration last week, saying the protest was peaceful.

Rabat and the Polisario Front have often accused one another of breaching the U.N.-supervised military truce in the phosphate-rich former Spanish colony, abandoned by Madrid in 1975 and then annexed by Morocco.

Morocco accused Algeria and Polisario of organizing a violent demonstration to scuttle efforts to forge a peaceful solution to the conflict before the council discusses the dispute on April 21. Polisario denied the allegation. (Reporting by Louis Charbonneau; editing by Anthony Boadle)

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