TRIPOLI, March 7 (Reuters) - Libyan leader Muammar Gaddafi has held talks with Mauritania's ousted president, and state media suggested on Saturday the African Union chairman recognised him as head of state despite last year's coup. Libya's state news agency Jana described Mauritania's ousted leader Sidi Mohamed Ould Cheikh Abdallahi as "the president". The overthrow last August of Mauritania's first democratically elected ruler caused donors to cut aid and cooperation. "Lengthy discussions took place during the meeting ... on the situation in Mauritania and the available possibilities to end this situation and reach a solution to be accepted by all parties," Jana said after the talks late on Friday between Gaddafi and Abdallahi in Sirte, Gaddafi's home town. Last week, Gaddafi held similar talks with Mauritania's junta chief Mohamed Ould Abdel Aziz, a former head of the presidential guard who seized power in a bloodless coup. Gaddafi, elected AU chairman this year, had dispatched an emissary to Mauritania last month to meet top officials from the two rival sides. Early in February, the AU imposed sanctions on Mauritania that include travel restrictions on all military personnel and civilians linked to the junta in Nouakchott. The United States and European Union have demanded Abdel Aziz reinstate Abdallahi, who was released from house arrest in December. But Abdel Aziz remains in power and has not ruled out standing in elections. Gaddafi had blamed "foreign parties" for trying to inflame Mauritania's crisis, a comment that made Abdallahi's supporters worry Gaddafi's mediation might lend legitimacy to the junta. But Jana calling Abdallahi the president appeared aimed at countering such concerns. Gaddafi is due to fly to Nouakchott early next week to lead mass prayers to mark the birthday of Prophet Mohammed -- an occasion he has used in previous years to broker peace deals in Africa including in Niger and Mali. (Writing by Lamine Ghanmi; Editing by Charles Dick)
