INTERVIEW-Russia wants anti-terror hub in C.Asia -Kyrgyz leader

* Kyrgyz leader: in talks with Russia on new military hub

* Says Russia to help train anti-terror forces in C.Asia

* Says unrest continues to spill over from Afghanistan



By Maria Golovnina

ALA-ARCHA, Kyrgyzstan, July 20 (Reuters) - Russia may open a new military facility in the Central Asian nation of Kyrgyzstan to help stem the rising tide of insurgency spilling over from Afghanistan, Kyrgyzstan's president told Reuters on Monday.

Instability has been on the rise in Central Asia in past months as ripples from increased fighting in Afghanistan and Pakistan appear to have reached the ex-Soviet Muslim region.

President Kurmanbek Bakiyev, who looks certain to win a presidential vote on Thursday, said the idea was to set up a hub designed to train forces in Kyrgyzstan's restive south.

"Talks on that are now being held with Russia but not to set up a new base but ... a new training centre," he said at his Ala-Archa residence in the rocky hills near the capital Bishkek.

"Southern Kyrgyzstan poses the biggest threat, and that involves our neighbours there, Tajikistan and Afghanistan. ... This training centre is where forces will be trained everything they might need in case of a terrorist insurgency."

Kyrgyzstan is a small impoverished nation at the heart of Russian-U.S. rivalry in Central Asia. It has become important due to its proximity to Afghanistan and both Moscow and Washington now operate military bases on its mountainous territory.

Bakiyev denied earlier statements by Kyrgyz sources that he could allow Russia to open another base on Kyrgyz soil to counter growing U.S. military clout.

"It will definitely not be considered a base, it will have a slightly different status," Bakiyev said. He added the facility could be located near Osh or Batken in south Kyrgyzstan.

"But so far it's just talks, discussions," he said. Both Russian and Kyrgyz forces could be trained there, he added.

Russian President Dmitry Medvedev declined to comment on the matter when asked about a possible new Kyrgyz base last week.



MILITANTS

Bakiyev said groups of militants operated in Central Asia aiming to control the vast potentially conflict prone region sitting on a key conduit for Afghan heroin smuggling.

"The Afghanistan situation is affecting not only Kyrgyzstan but Central Asia as a whole and, frankly, the entire world," he said. "People have come here to carry out acts of terror."

Some analysts say Taliban rebels of Central Asia origin, stirred by heavy fighting and more U.S. troops in the south, are now streaming back into their historic homeland -- a safe heaven for many due to its remote alpine passes and lax security.

A Kremlin sources said last week that Russia would hold a security summit in Kyrgyzstan late this month with Kazakhstan, Tajikistan, Belarus, Uzbekistan and Armenia.

Bakiyev said the situation in Kyrgyzstan was under control. "I would not say it is getting worse," he said. "But I also should not be too relaxed and say things are really good here either."

Military forces in Kyrgyzstan as well as in neighbouring Tajikistan and Uzbekistan have engaged in gun battles in past months with unidentified assailants who have staged attacks on security posts in Central Asia.

Officials remain at loss over who is behind these attacks and some critics have suggested Central Asia governments, concerned with growing public discontent due to a tough economic environment, are using it as an excuse to crack down on dissent.

"There are still forces out there that we do not know about, who are here and who are ready to carry out illegal actions," Bakiyev said. "They have one aim: to destabilise Central Asia and cause panic among the people." (Editing by Ralph Boulton)