* Candidates face sanctions unless withdraw from vote
* Madagascar in crisis since president seized power in 2009
* Mediation due next month
By Aaron Maasho
ADDIS ABABA, June 26 The European Union, the United States and the African Union proposed on Wednesday imposing sanctions such as travel bans on Madagascar's president and two other presidential candidates unless they withdrew from a planned election.
The former French colony has been in crisis since 2009 when President Andry Rajoelina seized power with military support, ousting former President Marc Ravalomanana and triggering turmoil that scared off investors and tourists.
Rajoelina and Ravalomanana had reached a deal with regional states not to run in this year's poll. But when Ravalomanana's wife, Lalao Ravalomanana, chose to run, Rajoelina said the pact had broken down and put his name forward.
As a result, foreign donors suspended election financing and the government had to postpone the vote by a month to Aug. 23.
"The group has encouraged the international community to consider applying robust, targeted sanctions against all ... stakeholders who are undermining the smooth running of the election," Ramtane Lamamra, African Union Commissioner for Peace and Security, told journalists in the Ethiopian capital.
Such measures would be imposed if the impasse was not resolved in mediation next month, he said speaking after the meeting of the so-called international "contact group".
The African Union and the Southern African Development Community (SADC) has demanded Rajoelina, Lalao Ravalomanana and ex-president, Didier Ratsiraka withdraw from the polls.
SADC mediator Joaquim Chissano, a former Mozambique president, travels to Madagascar on July 9 for talks to try to resolve the issue.
Lamamra said the African Union, SADC, the United States, the European Union, France and other members of the panel would list proposed sanctions soon. Paris has banned the three from entering France.
"These robust sanctions could include a travel ban, and the freezing of assets for the leaders, their relatives, collaborators and close business partners," Lamamra said.
He said the group also urged Madagascar's independent electoral body to determine new dates for the election "as soon as possible in consultation with the United Nations".
Chissano dismissed fears that the army could step in again, saying: "So far we have been having a good cooperation from the military and all security forces in Madagascar, who decided by free will to remain impartial."
(Editing by Edmund Blair and Alison Williams)