* Fighting among rival rebel groups has killed hundreds
* Assad portrayed as only alternative to Islamist extremism
* Peace talks planned in 10 days' time in Switzerland (Adds details, quotes from activists, ISIL statement)
By Khaled Yacoub Oweis
AMMAN, Jan 12 (Reuters) - A group linked to al Qaeda recaptured much of its stronghold in the northeast Syrian city of Raqqa on Sunday, activists said, dealing a blow to rival rebel groups backed by Gulf Arab and Western states.
Fighting between the al Qaeda-affiliated Islamic State of Iraq and the Levant (ISIL) and rival Islamists and more moderate rebels have killed hundreds of people over the last 10 days and shaken the hardline militant group led by foreign jihadists.
But with the latest counter-offensive, ISIL has regained much of the territory it lost, activists said.
In Raqqa, the only provincial capital under rebel control, activists said ISIL fighters battled remnants of rival Islamist units including the Nusra Front, another al Qaeda affiliate, in several neighbourhoods.
To the north, ISIL recaptured the town of Tel Abyad on the border with Turkey over the weekend, they said.
ISIL's growth has alarmed Western nations, who are pushing the opposition to attend peace talks in Switzerland in 10 days' time, and has helped President Bashar al-Assad to portray himself as the only secular alternative to Islamist extremism.
Abdallah Farraj, a member of the opposition Syrian National Coalition from Raqqa, said rebels had been able to expel ISIL from parts of the neighbouring Aleppo province, but it would be hard to shake ISIL's hold on Raqqa and rural areas along key supply lines across the north.
"The rebels lack the organisation and the firepower to win. It will be difficult to defeat ISIL without military strikes from someone like Turkey," he said.
Abu Khaled al-Walid, an activist speaking from the border area, said many fighters from Ahrar al-Sham, one of the most powerful Islamist groups, chose not to confront ISIL because the combatants were local people with little enmity for each other.
"Many did not see a point in fighting their own relatives. ISIL is now in control of 95 percent of Raqqa and its rural environs. Tel Abyad is also back with it," he said.
"NUCLEUS OF THE CALIPHATE"
Raqqa, on the Euphrates River 385 km (240 miles) northeast of Damascus, is the most significant city to have fallen completely to Assad's opponents since the revolt against his family's four-decade rule broke out in March 2011.
An ISIL statement called on Raqqa tribes to pull out their members from anti-ISIL rebel units and said the attacks against the group were designed to "destroy the nucleus of the caliphate" and promote a "heathen" alternative.
ISIL pulled out of Raqqa and other towns in northern Syria this month after an Islamist rebel alliance attacked its strongholds, taking advantage of growing popular resentment of the group's foreign commanders, their killing of other rebels and a drive to impose a strict interpretation of Islamic law.
But ISIL has regrouped in the last few days, using snipers, truck-mounted commando units and suicide bombers.
Opposition sources said the expertise of its foreign commanders, including a senior figure known as Omar al-Shishani, had been crucial to its advance.
In the province of Aleppo west of Raqqa, activists said ISIL had regained several rural towns, including Hreitan and Basraton, where ISIL killed a senior commander in the Nour al-Din Zanki brigades, a key unit in the newly-formed Mujahideen Army, which has been fighting ISIL in Aleppo.
Fighting also raged on Sunday between Western-backed Free Syrian Army units around the town of Retayan near Aleppo and in Urum to the east, as rebel infighting made the city vulnerable to advances by Assad's forces, the sources said.
Abdallah al-Sheikh, an activist in northern Syria, said Assad's forces had began bombarding areas from which ISIL had withdrawn, such as the town of Maarat Misreen and parts of Aleppo city.
"ISIL have been doing Assad a huge favour by killing many of the formidable rebel commanders and the regime has chosen to help it by not touching many of the areas it had taken. As soon as it withdrew, the bombing resumed," he said. (Additional reporting by Alexander Dziadosz; editing by Andrew Roche)