* Somalia seeks end to 21-year-old arms embargo
* U.S. supports lifting it, France, UK, Argentina oppose
* Yemen urges Iran to stop arming militants on its soil (Adds U.S. State Department comments throughout)
By Louis Charbonneau
UNITED NATIONS, Feb 11 (Reuters) - As the United States pushes for an end to the U.N. arms embargo on Somalia, U.N. monitors are warning that Islamist militants in the Horn of Africa nation are receiving weapons from distribution networks linked to Yemen and Iran, diplomats told Reuters.
The U.N. Security Council's sanctions monitoring team's concerns about Iranian and Yemeni links to arms supplies for al Shabaab militants come as Yemen is asking Tehran to stop backing armed groups on Yemeni soil. Last month the Yemeni coast guard and the U.S. Navy seized a consignment of missiles and rockets the Sanaa government says were sent by Iran.
According to the latest findings by the monitoring group, which tracks compliance with U.N. sanctions on Somalia and Eritrea, most weapons deliveries are coming into northern Somalia - that is, the autonomous Puntland and Somaliland regions - after which they are moved farther south into al Shabaab strongholds.
The supply chains in Yemen are largely Somali networks in that country, council diplomats said on condition of anonymity.
Yemen is just across the Gulf of Aden from Somalia's northern coast, making it easy to move all kinds of goods - legal and illegal - from the Middle East into Somaliland and Puntland.
"In Galguduud (central Somalia), Shabaab received arms, including IED (improvised explosive device) components," a Security Council diplomat said, referring to one of the Somalia/Eritrea Monitoring Group's most recent confidential reports. Several other council diplomats confirmed his remarks.
Other weapons supplied included PKM machine guns, said the group's monthly report for January.
"Given Iran's track record, both with regard to support for terror and with regard to proliferation, it would obviously not surprise us at all if they were now trying to make common cause with al Shabaab," U.S. State Department spokeswoman Victoria Nuland told reporters in Washington.
The monitors were scheduled to informally brief Security Council members on Friday but the meeting was canceled due to a blizzard, diplomats said. The U.N. monitors favor a gradual easing of the arms embargo rather lifting it as the Americans and the Somali government advocate, the diplomats said.
Yemen is proving to be crucial for arming al Shabaab, the monitors' reporting shows, because it is feeding arms into northern Somalia and because it has become a playing field for Iranian interests in Somalia and elsewhere.
The U.N. Security Council's Panel of Experts on Iran, which monitors compliance with the Iran sanctions regime, including the arms embargo on Tehran, is also looking at Yemen and evidence of Iranian arms shipments across Africa, council diplomats told Reuters.
Iran's U.N. mission did not have an immediate comment.
The monitors found Iranian and North Korean-made weapons that came to Somalia via Libya at a base of the U.N.-backed African Union peacekeeping force in Somalia. Diplomats who follow the issue said the arms were apparently recovered by the peacekeepers and raised important questions.
"Why are Iranian and North Korean small arms finding their way into Somalia from Libya? Do they date from before the arms embargoes (against North Korea and Iran)? How did they get there from Libya?" a council diplomat asked.
"It certainly emphasizes the point that Somalia is a country awash with arms and still very fragile," the diplomat said.
CONCERNS ABOUT LIFTING ARMS EMBARGO
U.N. Secretary-General Ban Ki-moon has said the 15-nation council should consider lifting the arms embargo to help rebuild Somalia's security forces and consolidate military gains against the al Qaeda-linked al Shabaab militants.
It is a position that has the strong backing of the United States, which is pushing for an end to the 21-year-old U.N. arms embargo. The Security Council imposed it in 1992 to cut the flow of arms to feuding warlords, who a year earlier had ousted dictator Mohamed Siad Barre and plunged Somalia into civil war.
Diplomatic sources said Ban's recommendation to support an end to the embargo did not appear in earlier drafts of his report but was added later on.
It is not the first time that a secretary-general's reports on various issues have been amended before publication in response to complaints from member states.
U.S. officials deny that Washington pressured Ban to support lifting the arms embargo against the Somali government. Nuland said the idea was to consider lifting the embargo for the government while keeping arms out of militants' hands.
"This is not an effort, in our view, to end the arms embargo wholesale," she said. "Somalia, countries in the region, the AU (African Union) want the way the thing is structured to be reviewed in light of the new realities. ... We do need to maintain the embargo on non-state actors, on al Shabaab, et cetera."
Nuland said one of the new realities is that Somalia finally has a legitimate government. The United States last month recognized Somalia's government for the first time in more than two decades.
Diplomats said Britain, France and Argentina are the council members most reluctant to end the embargo, preferring a gradual easing of it instead. The Somalia and Eritrea Monitoring Group has also opposed the idea of lifting it and see their latest findings as proof of why that would be unwise, diplomats said.
Those who oppose scrapping the arms embargo say Somalia's security sector still includes elements close to warlords and militants, an allegation the Somali government rejects. They also say the government can still get arms despite the embargo via requests to the U.N. sanctions committee.
"There are no Somali warlords that threaten peace and stability in Somalia," the alternate permanent representative for Somalia, Idd Beddel Mohamed, told Reuters. "They are normal citizens now, members of parliament. The embargo must be lifted."
But diplomats said the monitors have a different view - namely that specific units of the Somali security forces have links to warlords and are putting pressure on the Somali government to push for the arms embargo to be lifted.
Those in favor of lifting the embargo want a monitoring mechanism to ensure that arms purchased by the government do not end up in the hands of insurgents. But they also say that the government should have the means to continue improving security around the country as it appears to have al Shabaab on the run.
U.N. discussions on the Somalia arms embargo are expected to continue through March, when the Security Council must pass a resolution to renew the mandate of the AU peacekeeping force. (Additional reporting by Arshad Mohammed in Washington; editing by Christopher Wilson and Xavier Briand)