* Ivory Coast is re-admitted into the African Union bloc
* Talks go on to end violence in Abidjan
(Updates throughout)
By Aaron Maasho/Loucoumane Coulibaly
ADDIS ABABA/ABIDJAN, April 21 (Reuters) - The African Union lifted sanctions on Ivory Coast on Thursday, ending four months of diplomatic isolation, but fighting between armed groups underscored the challenges facing the new president.
The AU's move follows President Alassane Ouattara's victory in a post-election power struggle with Laurent Gbagbo, who had refused to step down after a November election but was captured last week in a French and United Nations-backed assault on his forces. Gbagbo is now under house arrest in the country's north.
Ouattara received almost universal international backing during the stand-off and international organisations have shown they are ready to help out. But he must heal deep divisions, including many within his own camp.
"We recommended that the president-elect (should) pursue building peace in Ivory Coast, reconcile people and make Ivory Coast a country where people are in unity," Joseph Nsengimana, Rwanda's AU ambassador and chairman of the AU's Peace and Security Council, told journalists on Thursday.
Nsengimana was speaking after the punitive sanctions, imposed to try and force Gbagbo to relinquish power, were lifted at a meeting in the Ethiopian capital Addis Ababa.
The European Union has also eased some of its restrictions, paving the way for exports to resume, although shippers say it will take weeks to reach normal volumes. [ID:nLDE73I1TI] Ivory Coast is the world's leading cocoa producer.
INSECURITY
But more than ten days after Gbagbo's arrest, pro-Ouattara forces are still struggling to get full control of the main city Abidjan, which was wracked by nearly two weeks of heavy fighting and looting.
On Wednesday Ouattara's forces clashed with remnants of pro-Gbagbo militia, as well as members of the formerly allied "Invisible Commando", which spearheaded attacks on Gbagbo's forces ahead of last month's full-out assault. [ID:nLDE73J22W]
Residents said fighting had died down in Abobo and Yopougon overnight, though sporadic gunfire was still heard.
Kascou Coul, a member of the Abobo-based "Invisible Commando", said they were on high alert and some colleagues had been arrested but Ibrahim Coulibaly, the force's chief, was seeking to resolve the situation.
There are long-standing divisions between Coulibaly and the pro-Ouattara forces.
A member of the pro-Gbagbo militia in Yopougon also said talks were under way. "They started yesterday. We want peace so life can return to normal in Yopougon," said Gerome Youan.
After months of failed diplomacy, the pro-Ouattara former rebels from the north launched an offensive in late March, seizing swathes of territory before becoming bogged down in urban combat.
U.N. and French forces intervened to destroy Gbagbo's heavy weapons in an operation that provided Ouattara forces the breakthrough they needed, ending a crisis that has killed well over 1,500 people and forced 1 million from their homes.
The turmoil has shattered Ivory Coast's economy and social services and the United Nations on Thursday warned of the threat of spreading polio after three children were confirmed as having the crippling disease. [ID:nLDE73K10B] (Writing by David Lewis and George Obulutsa; editing by Mark Heinrich)
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