UPDATE 2-Argentina to appeal Telecom Italia sale ruling

* Gov't threatens to push for intervention in local unit

* Vows to appeal court ruling in favor of Telecom Italia (Recasts, adds fresh quote, company no comment)

By Karina Grazina

BUENOS AIRES, Jan 18 (Reuters) - Argentina's government piled pressure on Telecom Italia (TLIT.MI) on Monday, threatening to nationalize its Telecom Argentina unit and vowing to appeal a court ruling that favored the Italian company.

Argentina's antitrust commission ordered Telecom Italia to sell its local holdings last year to prevent another European company from controlling the sector, and earlier this month it set an Aug. 25 deadline for it to comply.

An Argentine appeals court suspended the commission's deadline order [ID:nLDE60E28Q], but Planning Minister Julio De Vido said on Monday the government was planning a legal challenge in order to get it upheld.

"If the government's intentions don't prosper in the judicial field, we'll almost certainly go to Congress and ask them to take all measures to return the license and operation to the government," De Vido told a news conference.

Telecom Italia, Italy's No. 1 telecom operator, declined to comment.

Telecom Italia has been locked in a dispute with the government since 2007 when the country's antitrust commission started an investigation into the holdings of Spain's Telefonica (TEF.MC) in Argentina's two top phone companies.

The Spanish company controls telephone company Telefonica de Argentina TEA2.BA and -- through affiliate Telecom Italia, which it controls with a group of other shareholders -- also has an indirect stake in rival operator Telecom Argentina (TEC2.BA)(TEO.N).

Argentine President Cristina Fernandez and her husband and predecessor, former President Nestor Kirchner, have nationalized a leading water company, its flag carrier airline Aerolineas Argentinas and the private pension system.

Shares in Telecom Argentina closed down 4 percent at 13.2 pesos per share after falling by as much as 5.45 percent after De Vido spoke. (Additional reporting by Stephen Jewkes in Milan; Writing by Luis Andres Henao, editing by Martin Golan)