* PM Abiy's troops aim to encircle rebel-held Mekelle
* Tigrayan rebel forces say they are standing firm
* War kills hundreds, sends refugees fleeing to Sudan
* Government resists international appeals for ceasefire (Recasts with rebel and government statements)
ADDIS ABABA/NAIROBI, Nov 22 (Reuters) - Ethiopia's army plans to surround the rebel-held capital of Tigray region with tanks and may use artillery on the city to try to end a nearly three-week war, a military spokesman said on Sunday, urging civilians to save themselves.
The Tigray People's Liberation Front (TPLF), which is refusing to surrender its rule of the northern region, said its forces were digging trenches and standing firm.
Prime Minister Abiy Ahmed's federal troops have taken a string of towns during aerial bombardments and ground fighting, and are now aiming for Mekelle, a highland city of about 500,000 people where the rebels are based.
The war has killed hundreds, possibly thousands, sent more than 30,000 refugees into neighbouring Sudan, and seen rockets fired by rebels into neighbouring Amhara region and across the border into the nation of Eritrea.
Countries around Africa and Europe have urged a truce, but Abiy has so far rebuffed that.
"The next phases are the decisive part of the operation, which is to encircle Mekelle using tanks," military spokesman Colonel Dejene Tsegaye told Ethiopia Broadcasting Corporation.
"We want to send a message to the public in Mekelle to save yourselves from any artillery attacks and free yourselves from the junta ... After that, there will be no mercy."
'WAVES AFTER WAVES'
TPLF leader Debretsion Gebremichael told Reuters by text message that his forces were resisting a push from south of Mekelle while also fighting near the northern town of Adigrat after it had fallen to federal troops.
"Encircling Mekelle is their plan but yet they couldn't," he said. "On south front, they couldn't move an inch for more than one week. They (are) sending waves after waves but to no avail."
Reuters could not verify the latest statements on the war. Claims by all sides are hard to verify because phone and internet communication has been down since fighting began on Nov. 4.
Abiy accuses the Tigrayan leaders of revolting against central authority and attacking federal troops in the town of Dansha on Nov. 4. The rebels say his government has marginalised and persecuted Tigrayans since taking office two years ago.
The prime minister drew plaudits for opening up Ethiopia's closed economy and repressive political system after taking office. He won a Nobel Peace Prize last year for a peace agreement with Eritrea.
International rights groups say his government has carried out mass arrests after outbreaks of violence and detained journalists this year. The Nobel Peace Prize committee urged peace after his offensive against the Tigrayan leaders began.
Redwan Hussein, spokesman for the government's task force on Tigray, said there was still time for the TPLF leadership to surrender. "The government will take maximum restraint not to cause major risks for civilians," he added.
He said that while many Tigrayan special forces and militia fighters had surrendered or scattered around Adigrat, resistance was stronger on the southern front, where rebels have dug up roads, destroyed bridges and booby-trapped roads with explosives. He said government troops had taken high ground there and were moving forward.
Aid agencies fear a humanitarian disaster in a region where hundreds of thousands relied on food aid and were displaced even before fighting began.
(Writing by Katharine Houreld and Andrew Cawthorne Editing by Frances Kerry)