WRAPUP 1-Annan fears "imminent battle" in Syria's Aleppo
* Annan worried by build-up of troops and weapons
* Opposition urges allies to circumvent UN Security Council
* Battle for Aleppo seen as potential turning point
TAL RIFAAT, Syria, July 29 (Reuters) - International mediator Kofi Annan said he feared an "imminent battle" for Syria's biggest city Aleppo.
Syrian opposition sources said helicopters from President Bashar al-Assad's military pounded a rebel-held part of the city on Saturday and armoured units were positioned for an onslaught that could determine its fate.
"I am concerned about reports of the concentration of troops and heavy weapons around Aleppo, in anticipation of an imminent battle," Annan said in a statement.
"The escalation of the military build-up in Aleppo and the surrounding area is further evidence of the need for the international community to come together to persuade the parties that only a political transition, leading to a political settlement, will resolve this crisis."
But a Syrian opposition leader urged foreign allies to circumvent the divided U.N. Security Council and intervene.
"Our friends and allies will bear responsibility for what is happening in Aleppo if they do not move soon," said Abdelbasset Sida, the head of the Syrian National Council which is the main umbrella group for opposition to Assad.
"Any action has to be from outside the Security Council through an Arab League initiative and through a resolution passed by the General Assembly," he said early on Sunday on a visit to the United Arab Emirates for talks with officials.
French President Francois Hollande said he would keep trying to convince Russia and China, which have Security Council vetoes, to support harder sanctions against Assad that they have opposed during the 16-month-old uprising.
"I will once more address Russia and China so that they recognise there would be chaos and civil war if Bashar al-Assad isn't soon stopped," said Hollande.
He said the Syrian government knew it was doomed and would use force until the very end, adding: "The role of the member states of the U.N. Security Council is to step in as quickly as possible."
Russia played down speculation that it might offer Assad asylum, with Foreign Minister Sergei Lavrov saying on Saturday Moscow had no such agreement and was not even thinking about it.
The Syrian Observatory for Human Rights, an opposition monitoring group, reported helicopter attacks on Aleppo's central Salaheddine district and fighting elsewhere in the city.
"Helicopters are participating in clashes at the entrance of Salaheddine district and bombarding it," it said.
One opposition activist said he had seen tanks and armoured troop carriers heading for the district.
On the approaches to Aleppo from the north many villagers were still shopping or tending their fields. But fighters from the rebel Free Syrian Army were also in evidence.
One man in his 40s, carrying his family on a motorcycle, said he was fleeing the fighting in the city.
"We are living in a war zone," he told Reuters. "I and my relatives are just going back and forth, trying to stay away from the fighting. We left Aleppo when we saw smoke and helicopters firing."
The battle for the city of 2.5 million people is seen as a crucial test for a government that has committed major military resources to holding control of its two main power centres, Aleppo in the north and the capital Damascus.
While neither side has managed to gain the upper hand, the uprising is being watched anxiously outside Syria amid fears sectarian conflict could spill over its borders. Minority Alawites have dominated through more than 40 years of Assad family rule in Syria, which has a Sunni Muslim majority.
Military experts believe that while Assad's more powerful forces will overcome the rebels in Aleppo and other major cities, it risks loss of control in the countryside because the loyalty of large sections of the army is in doubt.
Three rebel fighters were killed in clashes before dawn on Saturday in Aleppo, the Observatory said. It said 160 people were reported killed in Syria on Friday, adding to an overall death toll of around 18,000 since the uprising began.
Video footage provided by the Observatory showed smoke rising over apartment blocks in the city into a hazy sky on Saturday. The sound of sporadic gunfire could be clearly heard.
Fighting was reported in other towns across Syria: Deraa, the cradle of the revolution, Homs, the scene of some of the bloodiest combat, and Hama.
At least 10 people were killed on Saturday when security forces went into Maadameyat al-Sham near Damascus, the Observatory said.
Russia has said international support for Syrian rebels would lead to "more blood" and the government could not be expected to willingly give in to its opponents.
It has also said it would not allow searches of Russian-flagged ships under new European Union sanctions governing vessels suspected of carrying weapons to Syria.
The increase in fighting in Aleppo follows a bomb attack on July 18 that killed Assad's defence minister and three other top officials in Damascus, a development that led some analysts to speculate that the government's grip was slipping.
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