* Tests showed Syria used sarin gas, says Kerry
* Arab League calls for international action
* France says it cannot act alone
* Israeli official says Israel fears Obama hesitation on Iran
By Yara Bayoumy and Thomas Ferraro
BEIRUT/WASHINGTON, Sept 1 (Reuters) - Syria hailed a “historic American retreat” on Sunday, mockingly accusing President Barack Obama of hesitation and confusion after he delayed a military response to last month’s chemical weapons attack near Damascus to consult Congress.
U.S. Secretary of State John Kerry said tests had shown sarin nerve gas was fired on rebel-held areas on Aug. 21, and expressed confidence that U.S. lawmakers would do “what is right” in response.
Washington says more than 1,400 people, many of them children, were killed in the attack.
It was the deadliest incident of the Syrian civil war and the world’s worst use of chemical arms since Iraq’s Saddam Hussein gassed thousands of Kurds in 1988. But opinion polls have shown strong opposition to a punitive strike among Americans weary of wars in Iraq and Afghanistan.
Obama’s announcement on Saturday that he would seek congressional authorisation for punitive military action against Syria is likely to delay any strike for at least nine days.
But the United Nations said his announcement could be seen as part of an effort to forge a global consensus on responding to the use of chemical arms anywhere.
“The use of chemical weapons will not be accepted under any circumstances,” U.N. spokesman Martin Nesirky said. “There should be no impunity and any perpetrators of such a horrific crime against humanity must be held accountable.”
Arab states called on the international community to take action against the Syrian government.
The final resolution of a meeting of Arab League meeting foreign ministers meeting in Cairo urged the United Nations and international community to “take the deterrent and necessary measures against the culprits of this crime that the Syrian regime bears responsibility for”.
The ministers also said those responsible for the attack should face trial, as other “war criminals” have.
Saudi Arabian Foreign Minister Saud al-Faisal told Arab League counterparts on Sunday that opposing international intervention would only encourage Damascus to use weapons of mass destruction.
The Syrian government says the attack was staged by the rebels. With Obama drawing back from the brink, President Bashar al-Assad reacted defiantly to the threat of Western retaliation, saying Syria was capable of confronting any external strike.
He left his most withering comments to his official media and a junior minister.
“Obama announced yesterday, directly or through implication, the beginning of the historic American retreat,” Syria’s official al-Thawra newspaper said in a front-page editorial.
Syrian Deputy Foreign Minister Faisal Mekdad accused Obama of indecision. “It is clear there was a sense of hesitation and disappointment in what was said by President Barack Obama yesterday. And it is also clear there was a sense of confusion as well,” he told reporters in Damascus.
Before Obama put on the brakes, the path had been cleared for a U.S. assault. Warships were in place and awaiting orders to launch missiles, and U.N. inspectors had left Syria after gathering evidence on the use of chemical weapons.
Kerry invoked the crimes of Adolf Hitler, Saddam and the potential threat to Israel from Syria and Iran in urging sceptical U.S. lawmakers to back a strike on Assad’s forces.
“This is squarely now in the hands of Congress,” he told CNN, saying he had confidence “they will do what is right because they understand the stakes.”
It became apparent on Sunday that convincing Congress of atrocities committed by Assad’s forces was only one of the challenges confronting Obama.
Lawmakers raised a broad array of concerns, including the potential effectiveness of limited strikes, the possible unintended consequence of sparking a wider Middle East conflict, the wisdom of acting without broader international backing to share the burden and the war weariness of the American public.
Many Democrats and Republicans are uneasy about intervening in a distant civil war in which 100,000 people have been killed over the past 2 1/2 years, and lawmakers have not cut short their summer recess, which ends Sept. 9.
Mike Rogers, Republican chairman of the House of Representatives Intelligence Committee, told CNN there were ”real challenges,“ but added: I think that at the end of the day, Congress will rise to the occasion. This is a national security issue.”
Republican Senator Rand Paul of Kentucky took a more sceptical view. “It’s at least 50-50 whether the House will vote down the involvement in the Syrian war,” he told NBC.
“I think the Senate will rubber stamp what he wants,” he said. “The House will be a much closer vote.” The Senate is controlled by Obama’s Democratic Party, while the House is in the hands of the Republican Party.
Members of Congress were briefed by Obama’s national security team on the case for military action and Kerry said he had more evidence backing accusations against Damascus.
“I can share with you today that blood and hair samples that have come to us through an appropriate chain of custody, from east Damascus, from first responders, it has tested positive for signatures of sarin,” he told CNN.
U.N. weapons inspectors collected their own samples and diplomats say Secretary-General Ban Ki-moon has told the five permanent Security Council members - Britain, China, France, Russia and the United States - that it would take up to two weeks before the final report is ready.
In Damascus, ordinary Syrians reacted with a mixture of relief, disappointment and scorn to Obama’s decision. “I have to admit this morning was the first time I felt I could sleep in,” said Nawal, who works as a housekeeper in the Syrian capital.
Bread had returned to the bakeries and members of the state security forces appeared relaxed, drinking tea and chatting at their posts outside government buildings.
“We always knew there wouldn’t be a strike,” one of them said. “It’s not going to happen. Anyway, we were never nervous about it. We were just worried for the civilians. But we’re confident it’s not going to happen.”
The United States had originally been expected to lead a strike relatively quickly, backed up by its NATO allies Britain and France. But British lawmakers voted on Thursday against any involvement and France said on Sunday it would await the U.S. Congress’ decision.
“France cannot go it alone,” Interior Minister Manuel Valls told Europe 1 radio. “We need a coalition.”
French President Francois Hollande, whose country ruled Syria for more than two decades until the 1940s, has come under increasing pressure to put the intervention to parliament.
A BVA poll on Saturday showed most French people did not approve of military action and most did not trust Hollande to conduct such an operation.
Jean-Marc Ayrault, his prime minister, was to meet the heads of both houses of parliament and the conservative opposition on Monday before lawmakers debate Syria on Wednesday.
French first lady Valerie Trierweiler said on Sunday she was still in shock over pictures of Syrian children killed in the attack and told France’s M6, “I do not know how one can bear it, how one can accept it.”
Syria and its main ally, Russia, say rebels carried out the gas attack to draw in foreign military intervention. Moscow has repeatedly used its U.N. Security Council veto to block action against Syria, saying it would be illegal and only inflame the civil war.
Critics say further delay by Obama is simply buying Assad more time.
The Istanbul-based Syrian opposition coalition said Assad had moved military equipment and personnel to civilian areas and put prisoners in military sites as human shields against any Western air strikes.
It said rockets, Scud missiles and launchers as well as soldiers had been moved to locations including schools, university dormitories and government buildings inside cities.
Reuters could not independently verify the reports, and attempts to reach Syrian officials for comment were unsuccessful.
Obama’s credibility has already been called into question for not punishing Assad over earlier alleged gas attacks, and he is under pressure to act now that he believes Damascus has crossed what he once described as a “red line”.
Failure to act, some say, could mean Iran would feel free to press on with a nuclear programme the West believes is aimed at developing an atomic bomb and that might encourage Israel to take matters into its own hands.
“If Obama is hesitating on the matter of Syria, then clearly on the question of attacking Iran - a move that is expected to be far more complicated - Obama will hesitate much more, and thus the chances Israel will have to act alone have increased,” Israeli Army Radio quoted an unnamed government official as saying.
Financial markets have been concerned about possible intervention in Syria and a delay caused by seeking congressional approval would be “a positive,” said Michael Yoshikami, CEO of Destination Wealth Management in Walnut Creek, California.
”A delay will let investors calm down and assess things. There was a lot of concern that there would be unilateral military action, because that could have had a major impact on oil prices, which in turn would have impacted GDP and consumer spending - not what we want to see with economic growth still so slow, he said.
Pope Francis called for a negotiated solution to the conflict in Syria and announced he would lead a worldwide day of prayer for peace in the country on Saturday.