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UNITED NATIONS, Sept 25 (Reuters) - U.S. President George W. Bush called on the Sudanese government and rebels to observe a cease-fire during peace talks next month, and urged fast action to end what he said was "genocide" in Darfur.

"We expect President (Omar Hassan) Bashir to observe a cease-fire during next month's peace talks and we expect the rebels to do the same," Bush told the U.N. Security Council.

"My nation has labeled what's taking place in Darfur as genocide and when you find genocide it's time to do something about it," he said. "Time is of the essence."

He said the current African Union peacekeeping force of around 7,000 troops was not enough to stop the killing in an area bigger than Texas and France.

The U.N. has already authorized an expanded U.N.-African Union force of up to 26,000 peacekeepers.

Earlier on Tuesday, Darfur rebel leader Khalil Ibrahim told Reuters he would carry on fighting during the peace talks until a final settlement is reached to end the conflict in western Sudan. Ibrahim is head of the Justice and Equality Movement, one of several rebel groups.

President Bashir said this month he would observe a cease-fire in Darfur when talks with rebels, scheduled for Oct. 27 in Libya, begin.

International experts estimate some 200,000 people have died and 2.5 million been driven from their homes during 4-1/2 years of fighting in Darfur.

Khartoum, putting the death toll at 9,000, rejects the term "genocide" and says the West has exaggerated the conflict.

Bush welcomed a Security Council resolution passed earlier on Tuesday that authorized a European Union peacekeeping force and U.N. police to help protect civilians in Chad and the Central African Republic from Darfur-related violence.

He also thanked U.N. Secretary General Ban Ki-Moon for his efforts on Darfur but said more needed to be done.

"The fundamental question is: are we, the free world, willing to do more?" Bush asked.

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