* House-to-house searches for rebels in Gao, Timbuktu
* Donors pledge $455 million for African force, more needed
* Pockets of Islamist fighters still reported outside towns
* France sees African troops taking over security role (Adds details on US aid to Mali operation)
By Richard Valdmanis and Adama Diarra
DOUENTZA/GAO, Mali, Jan 29 (Reuters) - French-backed Malian troops searched house-to-house in Gao and Timbuktu on Tuesday, uncovering arms and explosives abandoned by Islamist fighters, and France said it aimed to hand over longer-term security operations in Mali to an African force.
An 18-day offensive in France's former West African colony has pushed the militants out of major towns and into desert and mountain hideouts to head off the risk of Mali being used as a springboard for jihadist attacks in the wider region or Europe.
French and Malian troops retook the two Saharan trading towns of Timbuktu and Gao at the weekend virtually unopposed.
Doubts remain about just how quickly the African intervention force, known as AFISMA and now expected to exceed 8,000 troops, could be fully deployed in Mali to hunt down and eradicate retreating al Qaeda-allied insurgents in the north.
International donors meeting in Addis Ababa pledged just over $455 million for the Mali crisis. But it was not clear whether all of this would go directly to AFISMA, which African leaders have estimated will cost almost $1 billion.
"You will certainly understand that it is not sufficient. But I think it is only the beginning. We hope that it will continue, and that the money we need will come," Malian interim President Dioncounda Traore told reporters in Addis Ababa.
He earlier announced his government would aim to organise "credible" elections for July 31 in response to demands from major Western backers of the anti-rebel action.
Malian soldiers combed through the dusty alleys and mud-brick homes of Gao and Timbuktu. In Gao, they arrested at least five suspected rebels and sympathisers, turned over by local people, and uncovered caches of weapons and counterfeit money.
Fleeing Islamist fighters torched a Timbuktu library holding priceless ancient manuscripts, damaging many.
Residents reported some looting of shops in Timbuktu owned by Arabs and Tuaregs suspected of having helped the Islamists who had occupied the world-famous seat of Islamic learning, a UNESCO World Heritage site, since last year.
Malian troops have also been accused by international human rights groups of carrying out revenge killings of suspected Islamist rebels and sympathisers in retaken areas.
In the face of reports of such reprisals, France called on Tuesday for the swift deployment of international observers in Mali to ensure human rights are not abused.
Malian army sources told Reuters pockets of armed Islamist fighters, on foot to avoid French air strikes, were still hiding in the savannah and deserts around Gao and Timbuktu and near main roads leading to them, parts of which were still unsafe.
The West African country has been in political limbo since a March 2012 coup triggered the Islamist takeover of the north.
France has sent around 3,000 troops to Mali at the request of its government but is anxious not to get bogged down in a messy counter-insurgency war in their former Sahel colony.
The French have also made clear that while the first phase of liberating the biggest north Mali towns may be over, a more difficult challenge to flush the Islamist desert insurgents from their isolated rural lairs still looms.
"We will stay as long as necessary. We want to make sure there will be a good handover between France and AFISMA. There is no question of us getting stuck in the mud," French Foreign Minister Laurent Fabius said in Addis Ababa.
MORE FUNDS NEEDED
The leading donors pledging funds in Addis Ababa were Japan, the European Union and the United States. But African Union officials could not immediately break down how much was intended for the African intervention force, how much for Mali's army and how much for broader humanitarian purposes.
"The participants are of the view there is a need to continue to work together to mobilise further resources," said AU Peace and Security Commissioner Ramtane Lamamra.
Ivory Coast President Alassane Ouattara, who chairs the West African bloc ECOWAS contributing the most troops for the African Mali force, estimated its cost at more than $950 million.
The United States and European governments are backing the French and African military operation against the Islamist rebels with logistical, airlift and intelligence support, but they are not sending combat troops.
They regard the intervention as vital to root out an al |Qaeda-allied insurgency in West Africa that could threaten African governments and Western interests from Mauritania to oil-producing Nigeria, as well as strike directly in Europe.
The head of the U.N. mission in Libya, Tarek Mitri, told the Security Council the French-led military intervention could worsen a "precarious" security situation inside Libya by pushing fighters and arms across its porous Saharan borders.
U.S. DRONES FOR NIGER
The bulk of the planned African intervention force for Mali is still struggling to get into the country, hampered by shortages of kit and supplies and lack of airlift capacity.
Around 2,000 troops are already on the ground to fight the Islamists, who have retreated to the rugged northeast mountains of the Adrar des Ifoghas range on the border with Algeria.
Burkina Faso, Benin, Nigeria, Senegal, Togo, Niger and Chad are providing soldiers. Burundi and other nations have pledged to contribute. Hundreds of soldiers from Chad and Niger with desert warfare experience have already crossed into Mali.
The commander of Chad's forces in Mali, Abdu Aziz Hassan Adam, told Reuters in Gao his forces were ready to "sweep the terrorists out of the north of Mali. They are a threat for all the countries of the world".
Britain said on Tuesday up to 240 soldiers could take part in missions to train troops in Mali in addition to at least 90 already taking part in logistical operations.
The United States has extended deployment of surveillance drones that could track down rebel bases and columns in the Sahara desert. Mali's neighbour Niger on Tuesday gave permission for U.S. drones to fly from its territory.
The United States has also begun doing aerial refuelling for French aircraft in Mali, has been sharing intelligence with France and by Jan. 27 had ferried over 390 tonnes of equipment and supplies and over 500 personnel, the Pentagon said.
"This is a key effort...Terrorist groups have threatened to establish a safe haven in Mali and the French have done absolutely the right thing," said Pentagon spokesman George Little. Washington would consider further aid based on need. (Additional reporting by Aaron Maasho in Addis Ababa, Laurent Prieur in Nouakchott, Mohammed Abbas in London, Abdoulaye Massalatchi in Niamey, Lucia Mutikani, Anna Yukhananov and David Storey in Washington; Writing by Pascal Fletcher; Editing by Mark Heinrich)