* Army says it nearing crucial rebel supply route
* Advances give Assad more leverage at pending peace talks
* Al Qaeda-linked rebels take Aleppo-area town of al-Bab (Adds war developments across Syria, adds graphic)
By Oliver Holmes
BEIRUT, Jan 14 (Reuters) - The Syrian government has retaken territory around the northern city of Aleppo, the military said on Tuesday, after two weeks of rebel infighting that has weakened the insurgency against President Bashar al-Assad.
The internecine conflict among various rebel groups will allow Assad to portray himself as the only secular alternative in Syria to a radical Islamist regime when peace talks begin in Switzerland on Jan. 22.
His military advances will give the Syrian government delegation greater leverage at the negotiating table.
An army statement said government forces had pushed out from their base at Aleppo's international airport, southeast of the city, and were moving towards an industrial complex used as a rebel base and the al-Bab road, needed by insurgents to supply the half of Aleppo under their control.
It said that government forces, along with militia loyal to Assad, were in "complete control" of the Naqareen, Zarzour, Taaneh and Subeihieh areas along the eastern side of Aleppo, which was the major Arab country's commercial hub and most populous city before the conflict erupted in 2011.
In the past year, the Syrian government has pushed back at rebels across the country, besieging restive suburbs around the capital and pushing opposition fighters from towns near the Lebanese border and along the road linking Damascus to the coast.
Assad's forces took ground in central Homs province and his forces regrouped as rebel rivalries grew. While the embattled leader avoided U.S. military strikes by agreeing to give up his chemical arsenal, his forces continue to bomb opposition territory from the air and using long-range artillery. But neither side appears to be able to break the overall deadlock.
While the army has been able to take some towns on the outskirts of Aleppo, rebels have held their ground in the districts of the city they entered in 2012 and the government has not made major advances in the urban areas where opposition fighters are dug in.
Fighting between the al Qaeda-linked Islamic State of Iraq and the Levant and rival Islamists and more moderate rebels have killed hundreds of people over two weeks and shaken ISIL, a militant faction led by foreign jihadists.
But ISIL regrouped and retook much of its stronghold in the eastern city of Raqqa on Sunday from remnants of the Nusra Front, another al Qaeda affiliate although much more Syrian in makeup, and Islamist units called the Islamic Front.
ISIL took control of the town of al-Bab, east of Aleppo, from other rebels on Monday, according to the Britain-based Syrian Observatory for Human Rights monitoring group.
The Observatory, which tracks Syria's war using sources from both sides, said eight fighters from Ahrar al-Sham, a unit within the Islamic Front, were killed by an ISIL car bomb in the western province of Idlib just before midnight on Monday.
Syria sank into civil war after a peaceful street uprising against four decades of Assad family rule began in March 2011. The revolt spiralled into an armed insurgency after the army responded with massive and deadly force to suppress the unrest.
As the fighting spread, better-armed hardline Islamists took the fore over more moderate Muslim and secular rebels, who are supported by Gulf Arab and Western nations.
Syria's foreign ministry dismissed as "fantasy" statements by the pro-opposition Friends of Syria group - including Western and Gulf states - in Paris on Sunday that Assad was a war criminal and peace talks should end his "despotic regime".
"The Syrian Arab Republic is not surprised by what happened in Paris during the meeting of Syrian people's enemies and the statements, which are closer to fantasy than reality," the ministry said in a statement on Monday.
The World Food Programme delivered rations to a record 3.8 million people in Syria in December, but civilians in eastern provinces and besieged towns near the capital Damascus remain out of reach, a spokeswoman said on Tuesday.
The U.N. agency voiced concern at reports of malnutrition in besieged areas, especially of children caught up in the civil war, and called for greater access.
The official Kuwaiti news agency said non-governmental organisations had promised to donate a combined $400 million for humanitarian aid for Syria ahead of an international donor conference that will start in Kuwait on Wednesday. (Additional reporting by Stephanie Nebehay in Geneva and Sylvia Westall in Kuwait, Editing by Mark Heinrich)