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Abdelaziz, 69, had been leader of the Algeria-backed Polisario since 1976 after the group was founded three years previously to struggle for independence for the former Spanish colony.
Algerian President Abdelaziz Bouteflika on Tuesday decreed eight days’ national mourning, state television reported.
It added that the president had opened a meeting of the cabinet by observing a minute’s silence in tribute to the independence leader.
“This is a great loss for the Sahrawi people”, Polisario official Mohammed Keddad told AFP.
“He sacrificed his life for the liberation of Western Sahara. He embodied the wisdom and a sincere and firm commitment to its liberation”, he added.
Polisario leaders were meeting, and a statement would be issued later Tuesday or on Wednesday, an official told AFP.
The United Nations has been trying to broker a Western Sahara settlement since 1991 after a ceasefire was reached to end a war that broke out when Morocco deployed its military in the territory in 1975.
Local Sahrawi people are campaigning for the right to self-determination, but Morocco considers the territory as part of the kingdom and insists its sovereignty cannot be challenged.
In March this year, UN Secretary General Ban Ki-moon met Abdelaziz and also said he would spare no effort in trying to find a political solution in the Western Sahara.
When he met Ban at a refugee camp in Tindouf in Algeria, Abdelaziz appeared to be in poor health.
He was born in 1946 in Marrakesh in Morocco, the kingdom where he is seen as a traitor to his country.
A man of the desert, he spent much of his life with Polisario fighters or Sahrawi refugees at camps in the Tindouf region of southwest Algeria.
He was from the Reguibi, one of the three Sahrawi tribes, and was educated in southern Morocco, where his father was in the Royal Moroccan army.
In the late 1960s, Abdelaziz first met Sahrawi nationalist militants in Rabat and Casablanca, at Moroccan universities.
With Mustapha Sayed El Ouali, he became a founder of the Polisario Front in May 1973 and one of its main military leaders.
Speaking Arabic, French and Spanish in addition to the Sahrawi Hassanya dialect, Abdelaziz was as comfortable in a traditional blue gandoura robe as in a Western suit or plain military fatigues with no badges of rank.
Repeated bids by United Nations mediators to hold a referendum on self-determination for the Sahrawis in the vast desert but mineral-rich territory have failed.
In 2007, Morocco proposed a plan for autonomy under its sovereignty, but this is rejected by the Polisario Front which demands a referendum on self-determination.