* Mukhtar hanged by Italians for fighting colonial rule
* Rebels say Mukhtar would be on their side if alive
* Mukhtar becomes symbol of rebel movement
By Deepa Babington
SULUQ, Libya, May 9 (Reuters) - Near the grave of Libyan resistance hero Omar Al-Mukhtar, insurgents have painted a wall the rebel tricolour, ripped Muammar's Gaddafi's name from a stone plaque and scrawled anti-government graffiti everywhere.
This wasn't meant to be vandalism, but part of the rebels' efforts to reclaim the revered warrior's legacy which the Libyan leader alternately exploited and suppressed for four decades.
Nearly a century after Italian colonial rulers executed Mukhtar, the "Lion of the Desert" is now back as a spiritual father figure and icon for Libya's ragtag rebel movement.
Mukhtar's solemn figure clad in white robes gazes down from billboards, posters and bumper stickers throughout Libya's rebel-held east, from the insurgent stronghold Benghazi to the forgotten town of Suluq, where the Italians hanged him in 1931.
"Omar Mukhtar fought to free Libya from the Italians and the rebels are doing the same thing now, fighting to free Libya from Gaddafi," said Suluq merchant Tahar Ibrahim Absallah, whose grandfather Absalam Ali fought alongside Mukhtar.
Curled up on a rug in his Suluq shop stacked with sacks of dates and bottles of date oil, Absallah says he supplies the rebels with food just like his wealthy grandfather did with the camel, sheep and cows he owned.
A former Koran teacher affiliated with Libya's Salafi-inspired Senussi order, Mukhtar was skilled in desert guerrilla warfare and eluded his Italian captors for 20 years.
Legend has it that his resilience won him the grudging respect of the Italian officers sent by the country's Fascist leader Benito Mussolini to quell the rebellion.
"If he were alive today, Omar Mukhtar would be with the rebels," said Mustafa Mohammed, a Suluq shopkeeper. "And that's because he fought for freedom."
Mukhtar was a natural figure for rebels to latch on to because he is a legend among east Libyan tribes and because the 1981 film "Lion of the Desert" starring Anthony Quinn made him popular among younger Libyans, said Abdelmola Al-Horeir, a history professor at Benghazi's Garyounis university.
But few of the young Libyans waging the battle against Gaddafi are versed in Mukhtar's biography, he added.
"If you ask any of the rebels where Omar Mukhtar was from or where he was born, they don't know," Horeir said.
"They are proud of him, but they don't know much about him. They've just seen the film."
LION OF THE DESERT
Still, rebels are convinced they are the rightful heirs to Mukhtar's legacy -- though Gaddafi never saw it that way.
During his first visit as leader to Italy in 2009, Gaddafi stepped off the plane with a photo pinned to his chest of Italians standing over Mukhtar in chains, making a point to his embarrassed hosts that he was carrying on Mukhtar's fight.
Back home in Libya, east Libyans say Gaddafi went out of his way to prevent Mukhtar from developing a cult following, wary the fighter's legend would surpass his own.
Mukhtar's body lay for decades in a central square in Benghazi, the area he is closely associated with, until Gaddafi had it dug up and moved in 1981 to Suluq, a remote inland town few coastal urbanites have reason to visit.
Benghazi residents now speak of proposals to bring the body back to the city, although there are no formal plans yet.
Mukhtar's family members also complain Gaddafi mistreated them, refusing them a proper salary and then taking the body away to Suluq after lying that the family approved.
"The (grave was moved) because some demonstrators would gather in front of the grave and march from there," his granddaughter Khadija told an Egyptian newspaper.
"He (Gaddafi) also forced my uncle to appear with him to show that the Mukhtar family was with him."
GRANDIOSE VISION
Suluq, a town of low-roofed houses that gives visitors the feeling of having stepped back in time -- if they ignore the lone Coca-Cola sign -- was initially pleased to house Mukhtar's tomb.
Gaddafi came bearing promises of turning Suluq into a shrine for Mukhtar -- a plaque outlines plans for a mosque, mausoleum, museum, library and a school for Koranic teaching.
A billboard depicts a futuristic vision of the grave site, with red-carpeted steps flanked by palm trees leading up to a gleaming mausoleum.
Instead, visitors to the site are greeted by a compound overgrown with weeds, snail-infested lamps, a derelict building with a broken door and no security guard in sight.
The grave itself is simple, with a large portrait of Mukhtar standing next to it. A monument marks the spot where Italians hanged the warrior.
"We had hopes that they would do lots of things to develop the town, but they did nothing for us," said Mohammed Mohammed, a vegetable store owner in Suluq. "They just ignored us."
Suluq is once again hoping for better times now that the rebels have sought to wrest back Mukhtar's legacy.
As for the Italians who once built a concentration camp in the town but are back in east Libya as supporters of the rebels now, all is forgiven, says the merchant Absallah -- even if they killed his grandfather for fighting with Mukhtar.
"It's a new page now," he said. "They support us now, so we've forgotten about all they've done to us."
(Editing by Alexander Dziadosz and Giles Elgood)
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