Gbagbo's funds cut as Ivorian standoff deepens

* West African central bank blocks funds to Gbagbo

* Pressure mounts in deadly standoff

By Bate Felix

ABIDJAN, Dec 24 (Reuters) - Incumbent Ivory Coast leader Laurent Gbagbo faced a cash crunch that could make it tough for him to continue paying public salaries, after the West African regional central bank cut his access to funds.

World powers and African states have heaped pressure on Gbagbo to concede defeat in a Nov. 28 poll to his rival Alassane Ouattara in a standoff that has killed nearly 200 people and threatens to tip the country back into civil war.

Ministers from the Central Bank of the West African Economic and Monetary Union issued a declaration late on Wednesday saying the bank would no longer recognize Gbagbo&${esc.hash}39;s authority as president, and that access to funds would only be given to Ouattara&${esc.hash}39;s "legitimate government."

The move follows a World Bank decision on Wednesday to freeze some ${esc.dollar}800 million in committed financing, adding to expectations that Gbagbo may soon struggle to pay wages -- including to troops.

Gbagbo&${esc.hash}39;s Finance Minister Desire Dalo did not comment when reached by telephone late on Wednesday. A spokesman for Ouattara&${esc.hash}39;s government said the decision by the central bank was "a very important move toward controlling the economic power."

Military support for Gbagbo is seen as one of the main reasons he is able to defy calls to step down.

Ivory Coast&${esc.hash}39;s ${esc.dollar}2.3 billion bond due 2032 fell nearly a point to a record low on Thursday as investors worried that the country would be unable to meet a ${esc.dollar}30 million bond payment on Dec. 31.

Turmoil in the world&${esc.hash}39;s top cocoa-producing country has also boosted cocoa prices to recent four-month highs, disrupting export registrations and raising the possibility that fighting could block transport and shipping.

GRAVE BLOCKED

The election in the former regional star economy was meant to reunite the country following a 2002-03 civil war, but has instead aggravated divisions.

The United States, the United Nations, the European Union, the African Union and ECOWAS have all recognised provisional electoral commission results showing Ouattara as the winner, with Washington and Brussels issuing sanctions on Gbagbo and his inner circle.

But Gbagbo has shown no sign of caving in to pressure and insists he won the election after the Constitutional Court, which is headed by one of his allies, threw out hundreds of thousands of votes from pro-Ouattara constituencies.

The standoff turned violent last week after gun battles broke out briefly between government soldiers and rebels who now back Ouattara. Residents of pro-Ouattara neighbourhoods have said masked gunmen are now breaking into homes by night and kidnapping people [ID:nLDE6BL0P3].

A statement issued by the U.N. mission in Ivory Coast on Thursday said that masked supporters of Gbagbo armed with rocket launchers have been blocking a road to Anyama, around N&${esc.hash}39;Dotre, which it said is "a village outside Abidjan where allegations point to existence of a mass grave".

The U.N. Human Right Council issued a declaration of condemnation on the human rights violations and called for reconciliation to prevent civil war. (Writing by Richard Valdmanis; Editing by Jon Boyle)