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* Sources in northern Mali say Abou Zeid dead
* No official confirmation from Paris
* Algerians carrying out DNA tests on members of family- media
By Cheick Diouara
GAO, Mali March 1 (Reuters) - Sources close to Islamist militants and tribal elders in north Mali said on Friday there was no doubt one of al Qaeda's most feared commanders in Africa had been killed by French air strikes, though there was still no official confirmation.
Abdelhamid Abou Zeid was among 40 militants killed four days ago in the foothills of the Adrar des Ifoghas mountains, where French forces have been locked in heavy fighting with Islamist rebels, the sources said.
About 1,200 French troops and 800 Chadian soldiers are hunting down al Qaeda-linked insurgents in the border region with Algeria after a seven-week French ground-and-air operation broke Islamist domination of northern Mali.
Algeria's Ennahar television, which is well connected with the country's security services, had reported Abou Zeid's death on Thursday, though French, Malian and Chadian officials did not confirm it.
Citing a French source, Algeria's state news agency APS also said on Friday Abou Zeid had been killed.
An Algerian former smuggler turned jihadist, Abou Zeid is regarded as one of al Qaeda in the Islamic Maghreb's (AQIM's) most ruthless operators and a trusted lieutenant of its leader Abdelmalek Droukdel.
He imposed a violent form of sharia law, including amputations and the destruction of ancient Sufi shrines, during the Islamists' occupation of Mali's ancient desert town of Timbuktu, in acts reminiscent of the Taliban in Afghanistan.
"The death of Abou Zeid has been confirmed by several of his supporters who have come back from the mountains," said Ibrahim Oumar Toure, a mechanic in the northern Malian town of Kidal who worked with Islamist rebels and remains in contact with them.
A community leader in Kidal, who declined to be identified, also said there was no doubt that Abou Zeid was dead.
Some members of the MNLA Tuareg rebel group, based in Kidal, said Islamist prisoners seized during the fighting confirmed Abou Zeid had been killed.
French government spokeswoman Najat Vallaud-Belkacem said she could neither confirm nor deny the report while an official MNLA spokesman said it had no evidence proving he was dead.
French radio RFI and Algerian daily newspaper El Khabar reported that DNA tests were being carried out on members of Abou Zeid's family to confirm whether a body recovered by French troops after fighting in the Adrar des Ifoghas was indeed the Islamist leader.
The death of Abou Zeid, believed to be behind the lucrative kidnapping of more than 20 Westerners over the last five years, would be a significant but far-from-fatal blow to AQIM.
Mokhtar Belmokhtar, the one-eyed mastermind of the mass hostage-taking at the In Amenas gas plant in Algeria last month, and Tuareg Islamist leader Iyad ag Ghali, who was this week placed on the U.S. global terrorist list, both remain at large.
In a speech on Friday, French President Francois Hollande said the operation in Mali was in its final stage and he was not obliged to confirm Abou Zeid's death.
"Terrorist groups have taken refuge and are hiding in an especially difficult zone," he said. "Information is out there. I don't have to confirm it because we must reach the end of the operation."
According to local sources in Kidal, MNLA Tuareg rebels, who are working with French forces, had located Abou Zeid's fighters and handed over the coordinates for French jets to strike.
"They were hidden in mountain caves and were building bombs for suicide attacks when they were killed," Toure said.
Abou Zeid's death will be of particular interest to the French government as he is believed to be holding at least four French citizens kidnapped from Niger in 2010.
The French army, which could not confirm the death, said in a statement late on Thursday that it had carried out about sixty air strikes in the area destroying about a dozen vehicles. (Reporting By Elizabeth Pineau in Paris, Lamine Chikhi in Algiers and John Irish in Dakar; Writing by John Irish and Daniel Flynn; Editing by Andrew Heavens)