Angolan Rebels Closing In on Key City : Africa: Government warns guerrilla leader to give up lands gained or risk civil war.

Rebels ringed another key city Friday, and the government told guerrilla chief Jonas Savimbi he must give up all recent military gains to stop Angola from sliding back into civil war.

Savimbi’s troops already control about 60% of the country. On Friday, rebels encircled Malanje, the capital of the northern province of the same name, the state newspaper Jornal de Angola and Western diplomats said.

The paper said about 7,000 soldiers with 600 vehicles, artillery and other heavy arms were massing in nearby Xa Muteba. The guerrillas killed two policemen and eight civilians, including two children, the report said.

Despite a May, 1991, truce that ended 16 years of civil war, fighting flared two weeks ago after Savimbi refused to accept defeat in September elections he charged were fraudulent. The United Nations said the vote was generally free and fair.

The fighting that began two weeks ago has threatened to plunge the rebels, whose group is the National Union for the Total Independence of Angola (UNITA), back into all-out war with the governing Popular Movement for the Liberation of Angola (MPLA). More than 1,000 people have died in the latest violence; an estimated 350,000 died during the civil war.

The government’s military chief of staff, Gen. Antonio dos Santos Franca, known as N’Dalu, spoke to Savimbi by telephone at his headquarters near Huambo and set three conditions for peace talks, government officials said.

N’Dalu, who has spoken daily with Savimbi since the fighting flared, said the rebels must renounce violence, publicly accept the results of the elections and withdraw from cities and territory seized since then.

Rebel forces were routed from the capital, Luanda, but they overran two provincial capitals and made gains elsewhere.

On Thursday, Savimbi offered Angolans peace or another decade of war if he was provoked.

According to Western military sources, Savimbi has an estimated 55,000 well-armed guerrillas in this once-rich southwestern African nation.

Marrack Goulding, the U.N. undersecretary general for peacekeeping, met with both Savimbi and President Jose Eduardo dos Santos this week and warned that time was running out to make “a choice between war and peace.”