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* Algerian PM: 38 dead civilians, 29 militants killed
* Dead Canadian named as "Chedad" coordinated attack -PM
* Of hostages, 37 foreigners killed; five more still missing
* Three Islamist assailants taken into custody
* Japanese, Filipinos, Britons, Norwegians, Americans dead
By Lamine Chikhi
ALGIERS, Jan 22 (Reuters) - Algeria's prime minister accuseda Canadian of coordinating last week's raid on a desert gasplant and, praising the storming of the complex where 38 mostlyforeign hostages were killed, he pledged to resist the rise ofIslamists in the Sahara.
Algeria will never succumb to terrorism or allow al Qaeda toestablish "Sahelistan", an Afghan-style power base in aridnorthwest Africa, Abdelmalek Sellal told a news conference inAlgiers where he also said at least 37 foreign hostages died.
"There is clear political will," the prime minister said.
Claimed by an Algerian al Qaeda leader as a riposte toFrance's attack on his allies in neighbouring Mali the previousweek, the four-day siege drew global attention to Islamists inthe Sahara and Sahel regions and brought promises of support toAfrican governments from Western powers whose toppling ofLibya's Muammar Gaddafi helped flood the region with weapons.
The attack on a valuable part of its vital energy industryraised questions about the security capacity of an establishmentthat took power from French colonists 50 years ago, held off abloody Islamist insurgency in the 1990s and has avoided thedemocratic upheavals the Arab Spring brought to North Africa.
Sellal said a Canadian citizen whom he named only as Chedad,a surname found among Arabs in the region, was among 29 gunmenkilled and added that he had "coordinated" the attack. Anotherthree militants were taken alive and were in custody.
Among hostages confirmed dead by their own governments werethree Americans, seven Japanese, six Filipinos and threeBritons; others from Britain, Norway and elsewhere were listedas unaccounted for. Sellal said seven of the 37 foreign deadwere unidentified, while a further five foreigners were missing.
Nearly 700 Algerians and 100 other foreigners survived.
An Algerian security source said investigators pursuing thepossibility that the attackers had inside help to map thecomplex and gain entry were questioning at least two employees.
Prime Minister David Cameron told parliament in London thatBritain would increase its help to Algeria's intelligence andsecurity forces and might do more for France in Mali, though heruled out sending many of its stretched armed forces to Africa.
Noting a shift in the source of threats to British interestsfrom Afghanistan to Africa, he also noted Sellal's rundown of amultinational group of gunmen from across north and west Africaand said the region was becoming "a magnet for jihadists".
Alongside a "strong security response", however, he calledfor efforts to address long-standing grievances, such as povertyand political exclusion, which foster support for violence. Somemilitants in Algeria want autonomy for the south and complain ofdomination by an unchanging establishment in Algiers.
DEATH AND SURVIVAL
As Algerian forces combed the Tigantourine plant near thetown of In Amenas for explosives and the missing, survivors andthe bereaved told tales of terror, narrow escapes and of death.
"The terrorists lined up four hostages and assassinated them... shot them in the head," a brother of Kenneth Whiteside toldSky News, in an account of the Briton's death given to thefamily by an Algerian colleague who witnessed it. "Kenny justsmiled the whole way through. He'd accepted his fate."
Filipino survivor Joseph Balmaceda said gunmen used him forcover: "Whenever government troops tried to use a helicopter toshoot at the enemy, we were used as human shields."
Another Briton, Garry Barlow, called his wife from withinthe site before he was killed and said: "I'm sat here at my deskwith Semtex strapped to my chest."
Several hostages died on Thursday when Algerian helicoptersblasted jeeps in which the militants were trying to move them.
An Algerian security source had earlier told Reuters thatdocuments found on the bodies of two militants had identifiedthem as Canadians: "A Canadian was among the militants. He wascoordinating the attack," Sellal said.
In Ottawa, Canada's foreign affairs department said it wasseeking information. Security experts noted that some Canadiancitizens had been involved with international militants before.
Officials have also named other militants in recent days ashaving leadership roles among the attackers. Veteran IslamistMokhtar Belmokhtar claimed responsibility on behalf of al Qaeda.
In a video distributed on the Internet, the one-eyed veteranof Afghan wars of the 1980s, of Algeria's civil war and of thelucrative trans-Sahara cigarette smuggling trade, said: "We inal Qaeda announce this blessed operation."
Dressed in combat fatigues, Belmokhtar demanded an end toFrench attacks on Islamist fighters in Mali.
The jihadists had planned the attack two months ago inneighbouring Mali, Sellal added. They had travelled from therethrough Niger and Libya, hence evading Algeria's strong securityservices, until close to In Amenas. Their aim, he said, had beento take foreign hostages to Mali, and they made a first attemptto take captives from a bus near the site early on Wednesday.
Normally producing 10 percent of Algeria's natural gas, thefacility was shut down during the incident. The government saidit aimed to reopen it this week, although officials at Britain'sBP and Norway's Statoil, which operate the plant with Algeria'sstate energy firm, said the plans were not clear.
MALI CONFLICT
An Algerian newspaper said the jihadists had arrived in carspainted in the colours of Algerian state energy firm Sonatrachbut registered in Libya, a country awash with weaponry sinceWestern powers backed a revolt to oust Gaddafi in 2011.
Using his oil wealth, the Libyan dictator exercised a degreeof influence in the region and the consequences of his death arestill unfolding.
In a sign of the complexities wrought by the Arab Springrevolts, Egypt, a former military dictatorship now led by one ofthe generals' Islamist foes, criticised France's intervention inMali on Monday. President Mohamed Mursi called instead for morespending to address rebels' grievances and warned that themilitary moves would "inflame the conflict in this region".
The bloodshed also increased the strains in Algeria's longfraught relations with Western powers, where some complainedabout being left in the dark while the decision to storm thecompound was being taken.
But this week, Britain and France both defended the militaryaction by Algeria, the strongest military power in the Saharaand an ally the West needs in combating the militants.
Chafik Mesbah, a former Algerian presidential securityadviser, said: "The West did not criticise Algeria because itknows an assault was inevitable in the circumstances ... Thevictims were a minimum price to pay to solve the crisis."
