By Louis Charbonneau

UNITED NATIONS (Reuters) - U.N. Secretary-General Ban Ki-moon said on Wednesday that Syria mediator Lakhdar Brahimi would continue working as a joint U.N.-Arab League envoy, despite what U.N. diplomats said was Brahimi's desire to distance himself from the Arab bloc.

U.N. diplomats told Reuters on condition of anonymity on Tuesday that Brahimi hopes to revamp his role as peace mediator in the two-year-old Syrian conflict as a United Nations envoy without any official link to the Arab League.

But Ban, who was to meet Brahimi later on Wednesday, rejected the idea of amending the veteran Algerian diplomat's role.

"Lakhdar Brahimi has been and will continue to work as a joint special representative," he told reporters. "It is very important that the United Nations works together with the League of Arab States."

The reason Brahimi wants to distance himself from the Arab League, diplomats said, is its decision last month to recognize the Syrian opposition, a move that he feels has undermined his role as a neutral joint U.N.-Arab League mediator.

Because Brahimi's mandate comes from a 2012 U.N. General Assembly resolution, changing it to remove the Arab League element of his position would be difficult. Diplomats said he might have to resign and then be reappointed by Ban as a U.N. envoy if that option were to be taken seriously.

But Ban's comments on Wednesday suggest that he is opposed to the idea. Several diplomats told Reuters they were surprised that Ban so forcefully rejected an option that Brahimi was known to be seriously considering.

Brahimi did not respond immediately to a request for comment.

A senior Western diplomat reiterated on Wednesday that resignation remained another option for Brahimi.

Another diplomat said Ban was "pushing hard to not lose Brahimi, a second envoy in a year," adding that "a way out would be for him to resign (just) the Arab League hat." But Brahimi also has his resignation letter "in his pocket" if he feels it's necessary to step down, the diplomat added.

There have been rumors circulating for months that Brahimi was ready to resign due to his frustration at the failure of the United States and Russia to overcome their differences on Syria. That dispute has left the U.N. Security Council deadlocked and incapable of taking meaningful action on Syria because Washington and Moscow are veto-wielding permanent members.

Brahimi will present an update to the U.N. Security Council on Friday about the situation in Syria's two-year-old civil war, which the United Nations says has claimed more than 70,000 lives. Diplomats said they expect a bleak report.

Daily death tolls in Syria of around 200 are not uncommon, monitoring groups say. More than a million refugees have fled the country and the Syrian Red Crescent says nearly 4 million have been displaced internally.

Diplomats said Brahimi has grown extremely frustrated at the inability of the Security Council to unite behind his calls for an end to the violence and a peaceful political transition. His predecessor, former U.N. Secretary-General Kofi Annan, voiced similar frustration when he resigned in August.

(Additional reporting By Dominic Evans in Beirut; Editing by Mohammad Zargham)