U.S. targets finances of leader of al Qaeda in Mali

WASHINGTON (Reuters) - The Treasury Department said on Thursday it was freezing any assets the new leader of al Qaeda's branch in Mali may have in the United States and prohibited Americans from doing business with him, taking steps aimed at starving the finances of his militant group.

The sanctions targeted Yahya Abu Al-Hamman, leader in the Sahel of al Qaeda's North African wing AQIM, or al Qaeda in the Islamic Maghreb.

"We have witnessed the suffering that AQIM has inflicted on the innocent populations and hostages under its control and remain determined to cut off the funding it needs to recruit new members and carry out future terrorist attacks," Treasury Under Secretary for Terrorism and Financial Intelligence David Cohen said in a statement.

The Treasury Department said that kidnapping foreigners and holding them for ransom has netted the group millions of dollars. Currently, it is believed to be holding at least seven French hostages.

Around 4,000 French troops, backed by the Malian army and several thousand troops from other African states, have driven the al Qaeda-linked Islamist alliance from Mali's main northern towns into the remote northeast mountains.

But Islamist insurgent suicide bombings and a rebel raid last Sunday in the Saharan town of Gao have raised fears of the French becoming bogged down in an arduous counter-insurgency war in Mali.

(Reporting by Lisa Lambert; Editing by Will Dunham)