* Finance minister expects improved GE offer for power arm
* Siemens board meets to study rival bid with, Mitsubishi to play role
* German group due to present offer by Monday
* France wants guarantees on jobs, Alstom identity (Adds quote from source, background)
By Gus Trompiz and Natalie Huet
PARIS, June 15 (Reuters) - France is continuing to press for guarantees from contenders to buy power equipment assets from Alstom, as Siemens and Mitsubishi Heavy Industries consider a joint move to challenge a formal offer from General Electric.
The race to acquire power activities from Alstom, better known for its high-speed TGV trains, is entering a crucial week, with Siemens due to present an offer by Monday ahead of a June 23 cut-off date set by GE for its 12.4 billion euros ($16.88 billion) bid for all of Alstom's energy arm, which includes its thermal power, renewable power and grid businesses.
Alstom is privately owned but the government has taken an active role in the talks. It views the group's transport and energy activities, notably in nuclear power, as strategic and is keen to preserve jobs with unemployment stuck above 10 percent.
The French government has already secured a pledge from GE to create 1,000 new jobs in France within three years of a deal and Finance Minister Michel Sapin said on Sunday he expected the U.S. conglomerate to improve its offer further.
"Mitsubishi forming an alliance with Siemens improves Siemens' offer," Sapin said in an interview broadcast on Europe 1 radio and news channel iTele. "I think that GE is also going to improve its offer."
GE said in an emailed statement it had "made progress in our discussions with the French government, including expanded alliances in the energy businesses with French investors as well as a global partnership with Alstom on transport."
Siemens and Mitsubishi are putting the finishing touches on an offer for Alstom's turbine businesses, including a cash element of roughly 9 billion euros ($12.3 billion), according to sources close to the bidders.
Siemens' supervisory board was due to meet at 1600 GMT to consider an offer for Alstom. The German group has not commented on its discussions with Mitsubishi, but has said it would unveil a formal bid for Alstom assets by June 16.
In the move being considered by Siemens and Mitsubishi, the German firm would acquire Alstom's gas turbines business while the Japanese group would inject cash and industrial assets into a joint venture in steam turbines, sources said.
Under the deal, Mitsubishi and the French state would take equal stakes in Alstom, acquiring part of the 29 percent holding of French group Bouygues, union representatives said after meeting Economy Minister Arnaud Montebourg.
This could involve French state bank BPI acquiring a stake in Alstom alongside Mitsubishi, the Wall Street Journal reported on Sunday. A source familiar with the situation said BPI was "ready to be involved in any scenario", including with Mitsubishi or GE.
A Bouygues spokesman said the group had not been approached by any party regarding a sale of its stake in Alstom, adding: "Bouygues wishes to remain a long-term shareholder in Alstom with a 29.3 percent stake."
Bouygues would support the proposal recommended by the Alstom board, he said.
In a second step, separate to a turbines deal, Siemens is also proposing to combine its rail activities with Alstom's, sources said. The French government has actively lobbied for this, saying it would create a European rail champion.
An Alstom spokeswoman declined to comment.
Finance Minister Sapin said he did not have "any preference" for a bidder, but France would defend jobs and investment through a new decree extending the government's powers to block foreign takeovers in sectors deemed strategic.
His cabinet colleague Montebourg said in a newspaper interview on Friday a tie-up with Mitsubishi would be "a serious alternative" to GE's offer.
Some sources close to the matter warned that the Siemens-Mitsubishi plan would effectively break up the company's power business and ultimately run counter to the government's aim of preserving Alstom's integrity and scale.
"If this is all confirmed tomorrow, we'd be looking at a real dismembering of Alstom and desperately searching for the (energy equivalent of) European Airbus the government was calling for, given that a big chunk of the business would be going to Japan," said one source.
French President Francois Hollande will host a meeting on Alstom on Tuesday morning, according to his official diary, while Siemens Chief Executive Joe Kaeser is due to appear before a French parliamentary committee later that day.
($1 = 0.7345 Euros) (Additional reporting by Benjamin Mallet and Gregory Blachier; Editing by Sophie Hares, Robin Pomeroy and Cynthia Osterman)