* Interim president, PM step down under pressure from regional leaders
* Talks over future leadership to be held later in Bangui (Writes through with details, reaction)
By Madjiasra Nako and Paul-Marin Ngoupana
N'DJAMENA/BANGUI, Jan 10 (Reuters) - Thousands celebrated on the streets of Central African Republic's capital on the news that interim President Michel Djotodia had caved in to international pressure and resigned on Friday after failing to halt inter-religious violence.
The resignations of Djotodia and his Prime Minister Nicolas Tiangaye were announced in a statement issued at a two-day summit of the Economic Community of Central African States (CEEAC) in neighbouring Chad. Talks to decide on new leadership will take place in Central African Republic, it said.
Thousands of people have been killed and 1 million displaced by cycles of violence since abuses by Djotodia's mainly Muslim rebels, known as Seleka, prompted the creation of Christian self-defence militia after he seized power in March.
With memories of Rwanda's 1994 genocide stirred by the unrest, France sent hundreds of troops to its former colony last month to support African peacekeepers trying to keep the peace. But the killings have continued, and France repeatedly voiced its frustration with Djotodia's government.
Djotodia and Tiangaye resigned after Central African Republic's transitional assembly (CNT) was summoned to the Chad summit late on Thursday to decide on the country's future.
Under an agreement brokered by the CEEAC last year, the CNT elected Djotodia to his position as interim president in April to take Central African Republic to elections, due at the end of this year.
"We take note of the resignation. It is up to the CNT to decide what happens now," said French Foreign Ministry Romain Nadal spokesman. "France does not interfere in any case with this process."
The regional leaders, led by Chad's Idriss Deby, a French ally, had run out of patience with Djotodia. Sources told Reuters on Wednesday he would be forced to resign at the summit, although Djotodia's office had insisted he would remain in power.
As news from the summit reached the capital, thousands of residents took to the streets, dancing, singing and honking horns in celebration. Cheers erupted at a camp for 100,000 displaced Christian civilians at the French-controlled airport.
There was some sporadic gunfire but there were no signs of the pro-Djotodia fighters who once dominated the city.
"It's a new day for Central African Republic. God has heard our crying and our prayers," said Jeanne, a 71-year-old woman in Bangui, outside a shop where she said her son was killed by Seleka in March.
France has 1,600 troops in the country, operating under a U.N. mandate to assist an African force that is due to be bolstered to 6,000 men. It strengthened its military presence on the streets on Friday.
European Union officials proposed this week sending EU troops to support them.
The U.N. peacekeeping mission in neighbouring Democratic Republic of Congo said this week it was worried about the large numbers of Seleka fighters that had crossed the border.
The loose band of rebels was held together by frustrations over underdevelopment of the north and desire for control over the country's reserves of gold, diamonds, uranium and oil. Many of its men were battle-hardened fighters from Chad and Sudan.
But Djotodia has struggled to control his men and resistance peaked last month with an assault on the capital by Christian militia and gunmen loyal to ousted president Francois Bozize.
"Central African Republic is de facto under the tutelage of the rest of the region," said Thierry Vircoulon, an analyst at the International Crisis Group. "The problem is that so far the rest of the region has not been able to manage the transition very well." (Additional reporting by Emmanuel Braun in Bangui, John Irish in Paris and Daniel Flynn in Dakar; Writing by David Lewis; Editing by Daniel Flynn and Sonya Hepinstall)