* Arab League, African union want Bashir case deferred
* Improved peace prospects could sway Western powers
UNITED NATIONS, March 6 (Reuters) - The U.N. Security Council may be too divided at the moment to suspend the war crimes case against Sudan's president but an improvement in peace prospects in Darfur could one day break the deadlock.
The International Criminal Court in The Hague issued an arrest warrant this week for Sudanese President Omar Hassan al-Bashir for war crimes and crimes against humanity in Sudan's western Darfur region, where U.N. officials say as many as 300,000 people have died since the conflict erupted in 2003.
The Arab League and African Union have urged the council to use its power under Article 16 of the ICC statute to suspend the case against Bashir to avoid undermining the fragile peace process in Darfur and a rocky 2005 north-south deal that ended a two-decade civil war.
The Africans and Arabs have also suggested they would ignore the arrest warrant if Bashir visits their countries.
Libya, the council's rotating president for the month of March, said the council is deadlocked on the issue.
Moscow and Beijing back the AU and Arab push for a suspension. But the United States, Britain and France -- which like Russia and China are permanent council members with veto powers -- have said they see no reason to halt the process.
Privately, however, diplomats say all three Western powers could probably be persuaded to back a deferral in spite of public comments that seem to rule it out if they could wrest concessions from Khartoum that would improve the situation in Darfur and restart stalled peace talks.
The diplomats say the trio tend to reject the idea of a deferral in a cautiously worded fashion -- if a resolution suspending the prosecution of Bashir were submitted to the council today, they would veto it.
"They've always been very careful not to rule it out, to keep the door open," said one Western diplomat.
Another diplomat said any eventual deferral would be a temporary respite for Bashir. He expressed certainty that Bashir would one day be arrested and brought to The Hague.
NO SIGN OF PEACE
John Prendergast, co-chairman of the anti-genocide ENOUGH Project and former U.S. National Security Council official, said there was enough opposition to "a premature Article 16 deferral" to rule it out in the short term.
Longer-term prospects are different, he said.
"If there is a significant change on the ground, if we see a peace deal for Darfur as an extension of the (north-south peace deal), you could very possibly see a change in the mindset of some of those opposed now to a deferral," he said.
"Bashir's going to have quite substantial incentives to demonstrate some significant flexibility with respect to the peace processes, particularly in Darfur," Prendergast said.
Human Rights Watch international justice expert Richard Dicker said a council move to temporarily halt the Bashir prosecution would be a foolish mistake.
"It would shred any council credibility, since the council asked the ICC prosecutor to investigate crimes of Darfur," he said. "But the council is a political body. It doesn't necessarily operate with human rights first and foremost."
At the moment, Dicker said, there is no sign Bashir is ready to act in favor of peace, as demonstrated by his decision to expel over a dozen aid agencies from Darfur -- a move the United States condemned as a "callous" and "reckless".
The council is discussing a possible deferral and the humanitarian situation in Darfur at a closed-door meeting on Friday. The council is also expected to discuss the issue with AU and Arab delegations later this month.
Sudan's U.N. Ambassador Abdalmahmoud Abdalhaleem told reporters Khartoum, which has ignored two previous ICC indictments of Sudanese men over Darfur, does not want a deferral but for the case against Bashir to be dropped.
Sudan -- like the United States, Russia and China -- is not among the 108 parties to the ICC. But Security Council resolution 1593 requires it to comply with the ICC on Darfur.
The council has the right to suspend ICC proceedings for up to one year at a time but it cannot make them drop a case.
A deferral would require a Security Council resolution, which needs nine votes in favor and no vetoes in order to pass. (Editing by Todd Eastham)
Our Standards: The Thomson Reuters Trust Principles.