* Negotiations for peaceful solution flounder
* More fighters, arms bypass army siege to reach Falluja
* Sunni residents resent government, but fear al Qaeda
By Suadad al-Salhy
BAGHDAD, Jan 18 (Reuters) - Al Qaeda and other insurgent groups have tightened their grip on Falluja, defying the Shi'ite-led Iraqi government's efforts to persuade local tribesmen to expel them from the Sunni Muslim city, residents and officials say.
Despite an army siege, fighters and weapons have been flowing into the city, where U.S. troops fought some of their fiercest battles during their 2003-11 occupation of Iraq.
In an embarrassing setback for a state that has around a million men under arms, the al Qaeda-linked Islamic State of Iraq and the Levant (ISIL) and its tribal allies overran Falluja and parts of the nearby city Ramadi on Jan. 1.
Prime Minister Nuri al-Maliki, seeking a third term in a parliamentary election in April, deployed troops and tanks around the city of 300,000 and funneled weapons to anti-Qaeda tribesmen, but has ruled out a full-scale military assault.
He was quoted by the Washington Post on Thursday as saying that 80 soldiers and police had been killed so far, as well as more than 80 civilians and double that number of insurgents.
Ramadi, the provincial capital of the vast western province of Anbar, is mostly back under state control, but Maliki's calls on local tribesmen to evict the militants from Falluja, just 50 km (31 miles) west of Baghdad, have so far come to nought.
Instead, scores more ISIL fighters have sneaked into the city along with an array of weaponry ranging from small arms and mortars to Grad missiles and anti-aircraft guns, according to security and local officials, residents and tribal leaders.
"Our sources in Falluja indicate that militant numbers have increased to more than 400 in the last few days and that more anti-aircraft guns were received," said a senior local official who declined to be named. His figure could not be confirmed.
The weapons and fighters are reaching Falluja mainly from its southern environs, an area entirely under the sway of tribes hostile to the government, security officials said.
"The tribes scattered around Falluja have zero loyalty to the central government," Sheikh Mohammed al-Bajari, a tribal leader and negotiator in the city, told Reuters by phone.
"Now they (the army) are not controlling anything and no roads can be closed," he said of Falluja's southern approaches.
ISIL, which is also playing an aggressive role in Syria's civil war, is greatly outnumbered by armed tribesmen in Falluja, a symbol of Sunni identity and resistance in Iraq, many of whom lean towards the militants or other insurgent factions.
Since the city fell out of government control, various rebel groups have loosely aligned with ISIL or are asserting their own influence, officials, tribal leaders and residents said.
These include Islamist factions such as the 1920 Revolution Brigades, the Islamic Army, the Mujahedin Army, the Rashidin Army and Ansar al-Sunna, as well as the Army of the Men of the Naqshbandi Order, a Baathist militia created by Izzat al-Duri, a former lieutenant of Iraq's deposed leader Saddam Hussein.
Despite its limited numbers, ISIL dominates by its zeal and fearsome reputation on and off the battlefield, frequently using suicide bombers in Iraq and in Syria - where it has even turned them on rival rebel factions in a bitter power struggle.
In Falluja, it distributed leaflets on Thursday announcing a new "Committee for the Promotion of Virtue and Prevention of Vice" to enforce its strict Islamic code, residents said.
That recalled memories of the harsh Islamic courts set up in Falluja when the city was dominated by an umbrella group known as the Mujahideen Shura Council from late 2005 to 2006.
Dozens of youths accused of collaborating with the U.S. occupation were executed on the orders of these courts.
A leader of that council, Abdullah al-Janabi, who was also prominent in an ISIL precursor called the Islamic State of Iraq, returned to Falluja two days after its takeover this year.
"Blood is on the hands of all policemen. Police buildings were used to torture and to extract confessions ... and must be cleansed," the Sunni cleric told worshippers at the Saad bin Abi Waqas mosque in northern Falluja on Friday.
"We swear by God almighty and the blood of martyrs that the Safavid army will not enter the city except over our dead bodies," he said, in a derogatory reference to the Iraqi army.
About 200 masked militants using looted police vehicles guarded the road leading to the mosque, where worshippers were checked for weapons before Janabi's sermon at weekly prayers.
Many residents ignored a call from Sunni clerics involved in a year-long anti-government protest movement to gather for mass prayers at al-Furqan mosque in the city centre. Instead most worshippers prayed at neighbourhood mosques where gunmen were absent.
Many people in Falluja loathe Maliki's government, which they see as oppressive and provocative towards minority Sunnis, but also fear the revival of Islamist militant rule.
Last week Falluja community leaders nominated a new police chief and mayor. The militants responded by blowing up the police chief's house on Tuesday and briefly kidnapping the mayor. Both men have since fled north to Iraqi Kurdistan.
Two days later, they set up checkpoints in several districts and rummaged through people's wallets in search of identity cards that might reveal links with the security forces or government-backed Sahwa (Awakening) Sunni militias.
Fear of ISIL, as well as frequent bombardment by the army, which says it is responding to militant fire, prompted hundreds more families to flee the city in the last few days.
Eliana Nabaa, spokeswoman for the U.N. mission in Iraq, said more than 14,000 families - at least 80,000 people - had left Falluja and Ramadi since the crisis erupted in late December.
That figure does not include many displaced people not registered by the government or relief agencies, or those who have fled from Falluja since Thursday, she said.
Negotiations for the peaceful removal of ISIL from Falluja are continuing, but have yet to bear fruit.
"We don't expect ISIL fighters to respond positively," said a local official and negotiator, who declined to be named.
"They have come to impose their control on the city...so there is no way to drive them away without fighting." (Editing by Alistair Lyon and Sonya Hepinstall)