(Refiles Nov. 1 story to fix typo in author's name)

By Tim Cocks and Abdoulaye Massalatchi

NIAMEY, Nov 1 (Reuters) - Niger has asked the United States to start using armed drones against jihadist groups operating on the Mali border, raising the stakes in a counter-insurgency campaign jolted by a deadly ambush of allied U.S.-Nigerien forces.

On Oct. 4, Islamist militants with sniper rifles and rocket propelled grenades killed four U.S. soldiers and at least four of their Nigerien partners in an ambush that exposed the dangers of an expanding U.S. presence in the largely desert nation.

What began as a small U.S. training operation has expanded to an 800-strong force that accompanies the Nigeriens on intelligence gathering and other missions. It includes a $100 million drone base in the central Nigerien city of Agadez which, however, at present only deploys surveillance drones.

"I asked them some weeks ago to arm them (the drones) and use them as needed," Defence Minister Kalla Mountari told Reuters in an interview in his office. Asked if Washington had accepted the request, he said: "Our enemies will find out."

The deaths of the U.S. soldiers, at the hands of suspected insurgents with the Islamic State in the Greater Sahara group, shocked Americans, many of whom did not realize their country had such a large presence in Africa's Sahel region.

The incident also highlighted the "mission creep" that has set in and expanded the U.S. role in landlocked Niger, one of the world's poorest and most insecure countries.

Mountari said the team of 12 U.S. Special Forces soldiers and 30 Nigerien troops had been "right up to the Mali border and had neutralised some bandits" just before the ambush took place. He declined to give further details.

The U.S. military has been adamant that the Oct. 3-4 mission was not intended to involve contact with enemy forces.

Mountari said: "They (U.S.-Nigerien contingent) came back to Niger, they greeted the population, they gathered intelligence and it was inside the country, when they didn't expect anything, that the attack happened."

U.S. forces do not have a direct combat mission in Niger, but their assistance to its military does include intelligence, surveillance and reconnaissance in their efforts to target violent Islamist organisations.

However, Mountari was clear he saw them as close partners.

"The Americans are not just exchanging information with us. They are waging war when necessary," he said.

"We are working hand in hand. The clear proof is that the Americans and Nigeriens fell on the battlefield for the peace and security of our country."

But a growing U.S. role in Niger could prove unpopular both with Americans, many of whom are tired of costly and sometimes deadly foreign adventures, and in Niger, whose citizens have mixed feelings about foreign forces on their soil.

Drone strikes have been controversial in other parts of the world because of the risk of civilian casualties. At a protest rally over a domestic political issue on Sunday, dozens of demonstrators also began chanting against the presence of foreign troops in Niger, a Reuters witness said. (Reporting by Tim Cocks; editing by Mark Heinrich)

Our Standards: The Thomson Reuters Trust Principles.