Afghan rebel leader and al Qaeda ally Gulbuddin Hekmatyar on Thursday denied he had declared a ceasefire in his battle against Afghanistan's government, a spokesman said.

Hekmatyar is wanted by the Afghan government and U.S. authorities, but the veteran fighter who once led the biggest mujahideen faction against the 1979-89 Soviet occupation has a history of changing sides and shifting alliances.

A statement aired by two private Afghan television channels and circulated in Kabul said his Hezb-i-Islami had halted its armed struggle and sought peace. But a Hekmatyar spokesman denied the statement.

"Hezb-e-Islami leader Hekmatyar has not issued any statement, it is an attempt to vilify him and spoil his image," Hekmatyar spokesman Haroon Zarghon told Reuters.

"We will continue our jihad and we will never give up our armed struggle against the foreign troops and the Afghan government."

Hekmatyar's Hezb-i-Islami has suffered a steady sapping of its strength in recent years from military losses, the surrender of 10 of its leaders in 2004 and another of his commanders joining government ranks with 30 fighters just last week.

VETERAN FIGHTER

The veteran Hekmatyar has softened his rhetoric in recent months and condemned attacks such as those on schools and hospitals that often kill civilians.

But it would be difficult for him to make peace with the pro-Western government of President Hamid Karzai given his history.

Hekmatyar, a radical, anti-Western Islamist, once led the biggest mujahideen faction fighting Soviet forces and received the bulk of U.S. and Pakistani military aid.

After the end of the Soviet occupation and the fall of the Afghan communist government, he was briefly prime minister in a mujahideen administration that disintegrated into civil war.

During the fighting, Hekmatyar's militia, more than any other, was responsible for the destruction of Kabul by firing thousands of rockets into the capital, which had previously escaped the worst ravages of war.

After losing to the Taliban when they captured Kabul in 1996, Hekmatyar went into exile in Iran, but the Iranian government forced him to leave in early 2002 after becoming increasingly embarrassed by Hekmatyar's support for Osama bin Laden.

He then returned to Afghanistan and allied his fighters with the Taliban, launching attacks on Western and government targets from mountain strongholds in the southeast.