Algerian troops find huge arms cache on Libyan border

ALGIERS Algerian troops have discovered a huge cache of weapons near the border with Libya, including surface-to-air missiles, rockets and landmines, an Algerian security source said on Thursday.

"It is an arsenal of war," the Algerian source, who asked not to be named, told Reuters.

Algeria and Libya's other neighbors are worried about a dangerous spillover from growing turmoil in that country as Tripoli's fragile central government struggles to contain militias and Islamist militants operating in its lawless southern desert.

The source said the weapons found in Illizi in southern Algeria likely belonged to militants. They included 100 anti-aircraft missiles and hundreds of anti-helicopter rockets, landmines and rocket-propelled grenades.

The area is about 200 kms (125 miles) from the Amenas gas plant, which was attacked in January by Islamist militants in an assault launched from inside Libya that killed nearly 40 foreign contractors.

That attack and Libya's chaos have left energy companies wary over security in North Africa, where some U.S. oil majors in particular have begun to scale back. BP and Norway's Statoil are still assessing whether to send foreign workers back to Amenas.

As well as Al Qaeda in the Islamic Maghreb, other militant groups in North Africa include Ansar al-Sharia both in Tunisia and Libya, and the Movement for Unity and Jihad in West Africa or MUJWA, scattered this year by the French offensive in Mali.

MUJWA recently announced it was joining forces with another group led by veteran Algerian fighter Mokhtar Belmokhtar, who masterminded the attack on the Amenas plant.

Seven police were killed on Wednesday in battles with militants in Tunisia, where the government says Ansar al-Sharia, blamed for killing two opposition leaders, has benefited from Libya's chaos to get arms and training.

(Reporting by Lamine Chikhi; writing by Patrick Markey; editing by Barry Moody)