By Dominic Evans
BEIRUT, March 2 (Reuters) - An al Qaeda splinter group in Syria has denied it was behind the killing of a prominent al Qaeda figure last week and appeared to reject an ultimatum from rival fighters to accept mediation or face all-out assault.
The Islamic State in Iraq and the Levant (ISIL) was responding to the killing last Sunday of Abu Khaled al-Soury, who was close to both al Qaeda leader Ayman al-Zawahri and his predecessor Osama bin Laden.
Rival Islamist fighters blamed ISIL, locked in conflict for more than a year with other rebels battling to overthrow President Bashar al-Assad, for Soury's death.
Two days after his killing, the head of al Qaeda's Syria branch, the Nusra Front, warned ISIL militants to accept the arbitration of Muslim scholars within five days to end their infighting or face a war which would wipe them out.
That deadline has expired.
"We did not order Abu Khaled's killing nor were we ordered to. We were completely cut off from the area he was in," ISIL said in a statement dated Saturday and posted on Islamist Internet sites.
"We affirm that the decisions and stances of the Islamic State are only issued by our leader...(Abu Bakr) al-Baghdadi, may God protect him, and from the Shura Committee. Not from individual scholars or soldiers."
More than 3,000 people have been killed this year in fighting between rebel factions controlling northern and eastern Syria, an internal conflict which has seriously hampered their military campaign against Assad's forces.
Abu Khaled, a native of Syria's Aleppo who had spent time in Iraq and Afghanistan, was sent to Syria to try to end the internecine war, rebels say.
On Friday activists said ISIL fighters withdrew from the northern town of Azaz, near the border with Turkey, five months after they took it from rival opposition fighters.
The Syrian Observatory for Human Rights said ISIL had been suffering heavy losses in Azaz and had pulled back to parts of eastern Aleppo province where it remains powerful.
"The Islamic State is still present in most of rural east Aleppo...Al-Bab and towards Raqqa," the Britain-based Observatory's head Rami Abdulrahman said, describing a swathe of territory across northern Syria under ISIL control.
While there was no sign of an all-out attack on the Islamic State fighters from rival rebel forces, he said there were clashes in the eastern provinces of Deir al-Zor and Hassaka, where ISIL had withdrawn from one of its bases.
The Observatory said 13 people including a child were killed in air raids by Assad's forces on Saturday on the town of Kafar Takharim in the north-western province of Idlib.
Video footage posted by activists showed a street engulfed in flames and rescuers trying to reach people lying amid debris of broken concrete. Two people were carried away on stretchers, one bleeding from the leg and another, their face covered, with signs of severe burns and charring to their arms and hands.
The Observatory said a total of 250 people had been killed across Syria on Saturday, including fighters, soldiers and civilians. It says more than 140,000 people have been killed in nearly three years of conflict. (Writing by Dominic Evans; Editing by Rosalind Russell)