UN peacekeeping chief Alain Le Roy said Mr Gbagbo's forces, still using heavy weapons, had used a lull for peace talks to strengthen their position.

Mr Ouattara's forces have been battling Laurent Gbagbo, who is bunker in Abidjan, the country's main city.

Mr Le Roy said Mr Gbagbo's troops now fully controlled the upscale Plateau and Cocody areas of Abidjan.

"They clearly used the lull of Tuesday as a trick to reinforce their position," Mr Le Roy said, referring to a dip in the fighting after three of Mr Gbagbo generals requested talks.

He said that there was evidence that his forces were still using weapons including tanks, M-21 rocket launchers, rocket-propelled grenade launchers and armoured personnel carriers.

Earlier, the European Union said it had agreed to ease sanctions imposed against the country.

Alassane Ouattara, the country's internationally recognised president, had appealed for the easing to enable cocoa exports in the world's largest producer of the crop to resume.

Heavy-weapons fire from Mr Gbagbo's forces targeted the French ambassador's residence in the city on Friday, the French embassy said.

A spokesman for Mr Gbagbo said his forces had not attacked the building.

Ahoua Don Mello said he "formally denied" the French embassy's statement that the house had been targeted by two mortars and a rocket from positions held by Gbagbo's forces, AFP reports.