UPDATE 7-Rebel soldiers say they have seized power in Mali
* Whereabouts of President Toure unknown
* Regional body Ecowas condemns junta
* Hospital admits 20 with bullet wounds, no dead reported
* U.S. says backs Toure (Adds Ecowas, curfew)
By David Lewis and Tiemoko Diallo
BAMAKO, March 22 (Reuters) - Mutinous soldiers said they seized power in Mali on Thursday and ordered its borders closed, threatening to reignite conflict in a Saharan region shaken by the turmoil in Libya.
The overnight coup bid was led by low-ranking soldiers angry at the government's failure to stamp out a two-month-old separatist rebellion in the north of the west African state.
Heavy weapons fire rang out throughout the night as the presidential palace came under attack. The whereabouts of President Amadou Toumani Toure, who oversaw a decade of relative stability, are unknown.
Mali's neighbours, the United Nations and world powers from Paris to Washington called for a return to constitutional rule, while regional decision-making body ECOWAS Commission said it would not recognise the junta.
The 7,000-strong army has for weeks sought better weapons to fight northern Tuareg rebels bolstered by heavily armed ethnic allies who fled Libya after fighting for ousted leader Muammar Gaddafi.
Members of the newly formed National Committee for the Return of Democracy and the Restoration of the State (CNRDR) read a statement on state television saying they had taken over.
"The CNRDR ... has decided to assume its responsibilities by putting an end to the incompetent regime of Amadou Toumani Toure," said Lieutenant Amadou Konare, spokesman for the CNRDR.
"We promise to hand power back to a democratically elected president as soon as the country is reunified and its integrity is no longer threatened," said Konare, flanked by two dozen soldiers.
Government and military sources told Reuters the mutineers entered the presidential palace overnight after it was vacated by Toure and his entourage.
A loyalist military source and two diplomats told Reuters they believed Toure was sheltering in a military camp run by soldiers still loyal to him. The 63-year-old was due to stand down at an election set for April.
The CNRDR declared all land and air borders shut and a subsequent statement by Captain Amadou Sanogo, described as president of the CNRDR. Little is known about Sanogo except that he is an instructor at a military college.
Sporadic gunfire was heard throughout the day in the capital with reports of looting in some neighbourhoods. The junta denounced acts of vandalism and announced a curfew from 1800 to 0600 GMT, after an earlier curfew was widely flouted.
No deaths were reported, but an official at the Gabriel Toure hospital in central Bamako said around 20 people had been admitted with bullet wounds, with some in a serious condition. Locals complained of soldiers pillaging gas stations for fuel.
"They came, they starting shooting live bullets to make people leave so they can refill their tanks with unleaded and diesel. There, look, the concrete proof," said airport worker Ibrahima Konte, pointing to bullet wounds in his hand.
MNLA rebels said the confusion in the capital would allow them to make advances in their bid to carve out a desert homeland twice the size of France in the north of Mali.
"The situation (in Bamako) will allow us to take advantage of the chaos to gain more ground," Moussa Ag Acharatoumane, a Paris-based spokesman for the MNLA said by telephone.
Asked when they would advance on key northern towns such as Kidal, Timbuktu and Gao, he said: "I don't think it will be long. We are preparing this."
U.N. Secretary-General Ban Ki-moon called for calm and for grievances to be settled democratically. The African Union said it was "deeply concerned by the reprehensible acts currently being perpetrated by some elements of the Malian army".
ECOWAS, West Africa's top regional decision-making body, also condemned the mutiny.
"By this unconstitutional act, the junta has automatically alienated and outlawed itself from the community," ECOWAS commission president Desire Kadre Ouedraogo said in a statement, calling on the soldiers to immediately relinquish power.
French Foreign Minister Alain Juppe said in a statement Paris was suspending some security cooperation with Mali while the United States called on the army to place itself under civilian rule.
Investor nerves over Mali's gold sector - a key export earner - sent shares in London-listed miner Randgold Resources down 15 percent, despite a company statement that its operations there were not affected.
Heavy weapons and tracer fire rang out in Bamako throughout Wednesday night. As day broke, a Reuters correspondent saw soldiers still shooting in the air on the streets of Bamako where, despite the curfew, there were a number of motorists and motorcyclists.
"The people are with the (mutinous) soldiers," said one Bamako resident, Adama Tiarra. "We want a government that can sort things out." Others, however, said they were firmly against the attempt to unseat Toure's government.
In a sign of the breadth of the army mutiny, two military sources in the northern town of Gao confirmed the arrests of several senior officers in the town, a regional operations centre for the military.
A military source said an initial trigger for the mutiny was a visit on Wednesday by the defence minister to a barracks in the town of Kati about 20 km (13 miles) north of Bamako.
"The minister went to speak to troops but the talks went badly," the source said.
- For a factbox on Mali click here - (Additional reporting by Adama Diarra in Bamako, Richard Lough in Nairobi and Alister Bull in Washington; Writing by Mark John and Bate Felix; Editing by Jon Boyle and Andrew Roche)
© Thomson Reuters 2014 All rights reserved