WRAPUP 5-Aleppo rebels stand firm in "regime's grave"

* Assad's forces keep up assault in Aleppo

* Rebels deny army has driven them from Salaheddine district

* Syrian charge d'affaires in London quits

ALEPPO, Syria, July 30 (Reuters) - The Syrian military

stepped up its campaign to drive rebel fighters out of Aleppo,

but rebels said they were still holding firm in the country's

biggest city, which they have vowed to turn into the "grave of

the regime".

Opposition activists denied a government declaration that

its forces had recaptured the Salaheddine district, in southwest

Aleppo, straddling the most obvious route for Syrian troop

reinforcements coming from the south.

Hospitals and makeshift clinics in rebel-held eastern

neighbourhoods were filling up with casualties from a week of

fighting in the city, a commercial hub that had previously

stayed out of a 16-month-old revolt against President Bashar

al-Assad.

"Some days we get around 30, 40 people, not including the

bodies," said a young medic in one clinic. "A few days ago we

got 30 injured and maybe 20 corpses, but half of those bodies

were ripped to pieces. We can't figure out who they are."

The opposition Syrian Observatory for Human Rights said 40

people, 30 of them civilians, were killed in Syria on Monday.

Two rebel fighters died in Salaheddine.

Outgunned rebel fighters, patrolling in flat-bed trucks

flying green-white-and-black "independence" flags, said they

were holding out in Salaheddine despite a battering by the

army's heavy weapons and helicopter gunships.

A fighter jet flew overhead, a reminder of the overwhelming

military advantage still enjoyed by government forces 16 months

into the uprising.

"MERCENARY GUNMEN"

"We always knew the regime's grave would be Aleppo," said

Mohammed, a young fighter, fingering the bullets in his tattered

brown ammunition vest. "Damascus is the capital, but here we

have a fourth of the country's population and the entire force

of its economy. Bashar's forces will be buried here."

So far, however, the government's superiority on the ground

means rebels have had little success in holding on to urban

territory. The rebels made a major push into Damascus two weeks

ago, but were later driven out.

An unidentified Syrian army officer said on state television

late on Sunday that troops had pushed "those mercenary gunmen"

completely out of Salaheddine, adding: "In a few days, safety

and security will return to the city of Aleppo."

Reuters journalists in Aleppo have been unable to approach

Salaheddine to verify who controls it.

The army's assault on Salaheddine echoed its tactics in

Damascus earlier this month when it used its overwhelming

firepower to mop up rebel fighters district by district.

Assad's forces are determined not to let go of Aleppo, where

defeat would be a serious strategic and psychological blow.

Military experts believe the rebels are too lightly armed

and poorly commanded to overcome the army, whose artillery

pounds the city at will and whose gunships control the skies.

"Yesterday they were shelling the area at a rate of two

shells a minute. We couldn't move at all," said a man calling

himself a spokesman for the "Aleppo Revolution" group. "It's not

true at all that the regime's forces are in Salaheddine."

Warfare has stilled the usual commercial bustle in this city

of 2.5 million. Vegetable markets are open but few people are

buying. Instead, crowds of sweating men and women wait nearly

three hours to buy limited amounts of heavily subsidised bread.

In a city where loyalties have been divided, with sections

of the population in favour of the Assad government, some seemed

wary of speaking out in the presence of the fighters, many of

whom have been drafted in from surrounding areas.

Asked about his allegiances, one man waiting at a police

station that had been badly damaged by shellfire said: "We are

not with anyone. We are on the side of truth."

Asked whose side that was, he replied: "Only God."

Others stopped members of the Free Syrian Army (FSA) and

asked them to do something about the supply of bread and petrol.

Rebel fighters remain in control of swathes of the city,

moving around those areas armed with assault rifles and dressed

in items of camouflage clothing in an edgy show of confidence.

They were emboldened to strike at Aleppo and central

Damascus by a July 18 explosion that killed four of Assad's top

security officials.

The rebels include small numbers of foreign fighters drawn

from other Arab countries, commanders in northwest Syria say.

Some rebel checkpoints in Aleppo were flying black and white

banners of Islamist militants.

BIG POWERS DIVIDED

With big powers divided, the outside world has been unable

to restrain Syria's slide into civil war.

The only international military presence is a small, unarmed

U.N. observer mission. A convoy carrying the head of the mission

was attacked on Sunday and only the vehicles' armour prevented

injuries, U.N. Secretary-General Ban Ki-moon said on Monday.

He gave no futher details of the attack. U.N. officials said

on condition of anonymity that the convoy of five vehicles was

hit by small arms fire in Talibisa, some 17 km (10 miles) from

Homs, in what they said was an opposition-held area.

France said it would ask for an urgent meeting of the U.N.

Security Council to try to break the diplomatic deadlock on

Syria, but gave no indication that Russia and China would end

their longstanding policy of blocking measures against Assad.

In London, Syria's most senior diplomat resigned because he

could no longer represent a government that committed such

"violent and oppressive acts" against its own people, the

British Foreign Office said. Charge d'affaires Khaled al-Ayoubi

joins a growing number of senior Syrian officials who have

defected.

The deputy police chief of Latakia, a city in western Syria,

also defected and fled to Turkey overnight with 11 other Syrian

officers, a Turkish official said. Some 600 Syrians had arrived

in the last 24 hours, bringing the total number of Syrian

refugees in Turkey to around 43,500, he added.

Amid growing concern about security on its frontier, Turkey

sent at least four convoys of troops, missile batteries and

armoured vehicles to the border with Syria.

There has been no indication that Turkish forces will cross

the border, and the troop movements may just be precautionary in

the face of worsening violence in Syria.

A high-ranking officer in one of the convoys called the

deployment "part of a training exercise".

The United Nations humanitarian chief said 200,000 people

had fled Aleppo, only 50 km (30 miles) from the Turkish border,

in two days. It was not clear how this estimate had been reached

given the difficulty of assessing relief needs in war zones.

Assad's ruling system is dominated by his minority Alawite

sect, an offshoot of Shi'ite Islam, while his opponents are

mostly from Syria's Sunni Muslim majority. The sectarian element

in the conflict has raised fears that it could inflame

Sunni-Shi'ite tensions elsewhere across the Middle East.