* Assad expected to seek third presidential term
* Foreign critics have called vote a "parody of democracy"
* Infighting has weakened Assad opponents (Adds U.N., U.S. comments, U.S. indications of toxic chemical use, paragraphs 9-11, 17-19)
By Alexander Dziadosz
BEIRUT, April 21 (Reuters) - Syria announced on Monday a presidential election for June 3, preparing the ground for Bashar al-Assad to defy widespread opposition and extend his grip on power, days after he said the civil war was turning in his favour.
Western and Gulf Arab countries that back Assad's opponents have called plans for an election a "parody of democracy" and said it would wreck efforts to negotiate a peace settlement.
U.N.-backed talks in Geneva collapsed in February with both sides far from agreement - not least over the question of whether Assad should go.
Monzer Akbik, of the Western-backed National Coalition opposition group, told Reuters the election was a sign Assad was unwilling to seek a political solution to the conflict.
"This is a state of separation from reality, a state of denial. He didn't have any legitimacy before this theatrical election and he will not after," Akbik said.
"We do not know what actor he is putting up as an opponent but we are not taking this seriously."
Infighting has fragmented the anti-Assad forces, and several major opposition figures did not attend the Geneva talks.
The European Union reiterated its stance against holding an election now. It said such a vote "conducted in the midst of conflict, only in regime-controlled areas and with millions of Syrians displaced from their homes would be a parody of democracy, have no credibility whatsoever, and undermine efforts to reach a political solution."
U.N. Secretary-General Ban Ki-moon said: "Such elections are incompatible with the letter and spirit of the Geneva communique," referring to a June 2012 agreement on seeking a political transition in Syria.
U.S. State Department spokeswoman Jen Psaki said: "The Syrian regime under the Assads has never held a credible, free and fair election and has taken legal and administrative steps to ensure that this vote will not be fair.
"Calling for a de facto referendum rings especially hollow now as the regime continues to massacre the very electorate it purports to represent," she added.
The three-year-old rebellion against Assad has killed more than 150,000 people, forced millions to flee their homes and caused the government to lose control over swathes of territory.
PREPARATIONS FOR ASSAD
On Monday, 11 government and loyalist fighters were killed near Talbisah, an Alawite town north of the central city of Homs, according to the Syrian Observatory for Human Rights, an anti-Assad group based in Britain.
Alawites are followers of an offshoot of Shi'ite Islam. Assad is Alawite and the bulk of his opponents are Sunni Muslims, who form the majority of Syria's population.
On Sunday, dozens of people were killed in air strikes in the northern city of Aleppo, the Observatory said, including 14 people in the Baeedeen neighbourhood killed by "barrel bombs" - highly destructive improvised explosives dropped by helicopter, a tactic that Western countries have condemned as a war crime.
Gun battles, shelling and air strikes continue daily and the weekly death toll from the conflict regularly exceeds 1,000. The Observatory put Sunday's death toll at 273.
The U.S. State Department said on Monday it had indications a toxic chemical, probably chlorine, was used in the Syrian town of Kfar Zeita this month.
We are examining allegations that the government was responsible," Psaki told a regular news briefing. "Obviously there needs to be an investigation of what's happened here."
Syrian opposition activists reported that helicopters dropped chlorine gas on Kfar Zeita on April 11 and 12.
In Damascus, which has been spared the worst of the fighting, two people were killed by mortars fired by "terrorists", state news agency SANA said.
Although Assad has not said explicitly he will run for office again, preparations for his candidacy have already begun in state-controlled parts of the capital.
Announcing the election on state television, parliamentary Speaker Mohamed Jihad al-Laham said requests for nomination would be accepted until May 1. Syrians outside the country would be able to vote at Syrian embassies on May 28, he said.
Parliament set residency rules for presidential candidates in March, a move that would bar many of Assad's foes who live in exile.
Assad said last week the conflict had reached a "turning point" because of military gains against the rebels. (Additional reporting by Dasha Afanasieva in Istanbul, Adrian Croft in Brussels, Louis Charbonneau and Michelle Nichols at the United Nations, and David Brunnstrom and Doina Chiacu in Washington, Editing by Robin Pomeroy, Peter Cooney and David Gregorio)