* More support needed for those fighting Islamic State
* Hollande's diplomatic adviser travels to US for talks
* Paris hesitant about joining strikes in Syria (Adds details, talks on Syria)
By John Irish
PARIS, Aug 28 (Reuters) - French President Francois Hollande said on Thursday opposition forces fighting Islamic State militants in Syria and Iraq should receive more Western support, but he ruled out Syrian President Bashar al-Assad as an ally against the jihadists.
Syrian rebel forces have been fighting Assad for more than three years with political backing from the West in a war that has cost 190,000 lives. But hardline Islamist groups have increasingly dominated the anti-Assad struggle, posing a dilemma for Western countries.
"A large alliance is needed, but let's be clear. Assad is not a partner in the struggle against terrorism," Hollande said in a speech to an annual conference of French ambassadors.
Calling Assad an ally of the jihadists, he said: "There is no choice to be made between two barbarisms."
"Today, we are seeing the consequences (of inaction last year). The (Assad) regime continues without holding back its policy of repression, refugees are amassing in neighbouring countries and terrorist groups are gaining ground."
"The danger is immense," Hollande added.
Militant fighters of Islamic State, a radical al Qaeda offshoot, have seized swathes of both Syria and Iraq in recent months, alarming regional and Western governments, and have vowed to establish a trans-border Sunni Muslim caliphate.
France was the first Western country to recognise Syria's opposition forces, but was left out on a limb last year when the United States called off planned air strikes against Assad just hours before French planes were due to take off.
French diplomats have said Paris will be prudent before committing to any future direct military action.
"After what happened last year, now when the Americans decide to do something we will need some very strong guarantees before committing to anything. The Americans first have to decide what they want to do," said a senior French diplomat.
Hollande's diplomatic adviser will travel to the United States later on Thursday to discuss how to deal with the Islamic State and the possibility of air strikes on the group's powerbase in Syria. The United States has already staged air strikes against the militants in neighbouring Iraq.
Last week, France said it had provided weapons to the "moderate" Syrian opposition, but diplomats say there are differences of opinions between Paris and Washington over whether to provide more support in the future as efforts to fight the Islamic State militants in Syria increase.
Highlighting those possible differences, in a text provided before his speech Hollande specifically called for the international community to arm Syrian opposition forces fighting Islamic State. That was replaced in his speech with a call for international partners to understand the dimension of the conflict and urgency to mobilise under international law.
Hollande, who said France would also increase its support for Iraq where so far it has only provided weapons to Iraqi Kurds in the north of the country, reiterated his plans for an international conference to help coordinate humanitarian and military action against Islamic State in the region.
French diplomats have said they hope to hold the meeting, which would include Iran, Arab states and the five permanent members of the U.N. Security Council, between Sept. 15-20, depending on the formation of a new Iraqi government.
"To fight Islamic State, the first condition is for Iraqis to unite," Hollande said. (Reporting By John Irish, Editing by Alexandria Sage and Gareth Jones)
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