* Government pays public sector salary arrears
* Armed guards outside banks for reopening
By Loucoumane Coulibaly and Ange Aboa
ABIDJAN, April 28 (Reuters) - Ivory Coast's banks began reopening on Thursday after a 10-week shut-down that strangled the local economy, with cash-strapped Ivorians forming long queues to withdraw money and receive delayed salary payments.
The restart of the banking system is for many locals the clearest sign yet of a return to normality in the West African state after a four-month power struggle that brought the world's top cocoa grower to the brink of a new civil war.
It comes after Alassane Ouattara's government said it was making 177 billion CFA francs ($395 million) available to pay two months of salary arrears to public sector workers, a cash lifeline officials hope will filter quickly down to local businesses.
Banking officials said there were still some shortages of cash for over-the-counter transactions but clients said cash machines appeared to be well-stocked.
"I have been here since 6.30 this morning to get my two months of salary," 32-year-old civil servant Adelaide Gbocho said outside a bank in Abidjan's Plateau business district.
"Things are tight at home. The children need to eat."
Ex-president Laurent Gbagbo's refusal to step down after a disputed Nov. 28 election triggered Western financial and trade sanctions, prompting international banks to close their local branches despite threats by Gbagbo to nationalise them.
Gbagbo was judged to have lost the election according to U.N.-certified results, but he alleged they were rigged and refused to quit.
Local units of banks BNP Paribas
The April 11 arrest of Gbagbo in a French-backed raid on his residence by pro-Ouattara forces brought the prospect of peace closer, but pro-Gbagbo militias have been involved in sporadic battles around Abidjan. Armed soldiers were posted outside many of the newly opened banks.
"The cash machines are working. I've seen several people withdrawing cash, I am waiting my turn," said 41-year-old Silvere Konin outside the Ivorian Banque de l'Habitat.
Ouattara told French newspaper La Croix in an interview released on Wednesday that close to 3,000 people were killed in the conflict, nearly double previous official tolls.
Ouattara said he aimed to form a unity government including members of Gbagbo's FPI party by the end of May. He hoped to be inaugurated on May 21 and said several heads of state had been invited, alongside Pope Benedict.
Gbagbo, his wife Simone and dozens of close associates are under house arrest at various locations around the country.
Ouattara's government said on Wednesday Gbagbo would face charges of human rights abuses. French radio RFI quoted prosecutors as saying the charges would be linked to violence after the disputed election, in which dozens of opposition protesters were killed in clashes with his security forces.
(Additional reporting by Brian Love in Paris; writing by Mark John; Editing by Giles Elgood)