* U.N. Security Council has demanded peacekeepers improve
* Khartoum says situation in Darfur better
* Peacekeepers say doing best they can in vast region (Adds government denial, UNAMID reaction)
By John Irish
PARIS, April 11 (Reuters) - A veteran rebel leader from Sudan's Darfur region accused international peacekeepers on Friday of turning a blind eye to what he called a renewed campaign of ethnic cleansing by government-backed Arab militias.
The joint U.N/African Union UNAMID peacekeeping force told Reuters it was doing as much as it could policing the vast western territory - and Sudan's government dismissed rebel leader Minni Minnawi's account of a fresh offensive.
International efforts have failed to end clashes in Darfur, more than 10 years after Khartoum unleashed militias to try and crush a rebellion by mostly non-Arab insurgents.
Frustrated with the lack of progress, the U.N. Security Council last week demanded improvements in UNAMID, and urged Khartoum to improve cooperation with the mission.
"UNAMID is there to protect civilians and monitor peace, but it is not doing its job. It is covering up the crimes of the Sudanese government and legalising genocide," Minnawi told Reuters during a visit to Paris.
"There is a military escalation in Darfur. Each day Janjaweed (Arab) armed militias are targeting civilians and burning villages," said Minnawi, the leader of a faction of the rebel Sudan Liberation Movement that has also carried out large-scale attacks.
Sudanese army spokesman Sawarmi Khaled Saad denied government forces were targeting civilians, describing the situation in Darfur as "going from good to even better".
"Minnawi's forces are the ones targeting civilians and burning villages," he said.
An official at UNAMID said the mission as doing as well as it could and had protected thousands of civilians in recent weeks.
"We are carrying out our duty in Darfur, but it is a vast region and our forces are not present everywhere."
Washington and rights campaigners have called Khartoum's crackdown in the region "genocide" - a charge dismissed by Khartoum. Analysts have also accused rebels of carrying out atrocities.
U.N. and African Union officials last month said violence had worsened again in Darfur, displacing hundreds of thousands of people this year.
Darfur insurgents took up arms accusing the government of neglecting the area and discriminating against its ethnic groups. But the conflict has since descended into a free-for-all involving bandits, rival tribes and rebel splinter groups.
"The situation is getting worse. From the Blue Nile to South Kordofan and Darfur, the humanitarian situation is terrible and the government is creating this situation," Minnawi said in an interview, referring to two southern regions where the government is also battling insurgents.
Minnawi was the only major rebel leader to sign a failed 2006 peace deal with Khartoum. He was a presidential assistant after the accord, but later returned to the battlefield.
"My experience was bitter. That's why I'm fighting now," he said. "The Sudanese government will sign any deal even swearing on the Koran or Bible, but will never implement it."
He said Sudan's president Omar Hassan al-Bashir was stepping up his campaign in Darfur while world powers were distracted by conflicts in Central African Republic and South Sudan.
"The problem will worsen. There will be chaos in the whole region and it will cost the international community a high price," he said. (Additional reporting By Khalid Abdel Aziz in Khartoum; Editing by Andrew Heavens)