(Adds Kerry and Assad quotes, WASHINGTON dateline, byline)

* Tests showed Syria used sarin gas - Kerry

* France says it cannot act alone

* Israel fears Obama may hesitate on Iran - unnamed official

* Syria used chemical weapons - ex-president of Iran

* Some Syrian activists believe attack will never happen

By Yara Bayoumy and Thomas Ferraro

BEIRUT/WASHINGTON, Sept 1 (Reuters) - Syria hailed an "historic American retreat" on Sunday, mockingly accusing President Barack Obama of hesitation and confusion after he delayed a military strike to consult Congress.

U.S. Secretary of State John Kerry said tests showed Damascus had used using deadly sarin gas in a chemical weapons attack, and expressed confidence that Congress would do "what is right" in deciding on a response.

With Obama drawing back from the brink on Saturday, France said it could not act alone in punishing President Bashar al-Assad for the Aug. 21 attack, making it the last remaining top Western ally to hesitate about bombing Syria.

Assad said Syria was capable of confronting any external attack, but left the most withering comments to his official media and a junior minister.

"Obama announced yesterday, directly or through implication, the beginning of the historic American retreat," Syria's official al-Thawra newspaper said in a front-page editorial.

The U.S. president said on Saturday he would seek congressional consent before taking military action against Damascus for the attack which he blames on Assad's forces - a decision likely to delay any strike for at least nine days.

Syria's deputy foreign minister Faisal Mekdad accused Obama of indecision. "It is clear there was a sense of hesitation and disappointment in what was said by President Barack Obama yesterday. And it is also clear there was a sense of confusion as well," he told reporters in Damascus.

However, Syria's opposition coalition called on Sunday on Congress to approve military action and said any intervention should be accompanied with more arms for the rebels.

Obama made his surprise announcement in a gamble that will test his ability to project American strength abroad and deploy his own power at home.

Before he put on the brakes, the path had been cleared for a U.S. assault. Navy ships were in place and awaiting orders to launch missiles, and U.N. inspectors had left Syria after gathering evidence of a chemical weapons attack that U.S. officials say killed 1,429 people in rebel-held areas.

The United States had been expected to lead the strike soon, backed up by its NATO allies Britain and France. However, the Westminster parliament voted last Thursday against any British involvement and France said on Sunday it would await the U.S. Congress's decision.

"France cannot go it alone," Interior Minister Manuel Valls told Europe 1 radio. "We need a coalition."

France, which ruled Syria for more than two decades until the 1940s, has, like the United States and Britain, the military strength to blitz the country in response to the poison gas attack on areas around Damascus, which the Syrian government has accused the rebels of staging.

President Francois Hollande reaffirmed to Obama on Saturday his will to punish Syria but has come under increasing pressure to put the intervention to parliament.

A BVA poll on Saturday showed most French people do not approve of military action against Syria and most do not trust Hollande to conduct such an operation.

His prime minister Jean-Marc Ayrault is scheduled to meet the heads of the two houses of the French parliament and the conservative opposition on Monday before a parliamentary debate on Syria on Wednesday.

DEADLIEST INCIDENT

Last month's attack was the deadliest incident of the Syrian civil war and the world's worst use of chemical arms since Iraq's Saddam Hussein gassed thousands of Kurds in 1988.

However, polls also show strong opposition to a strike on Assad's forces among Americans weary of wars in Iraq and Afghanistan. Congressional approval will more than a week, if it comes at all.

A senior Syrian rebel expressed concern about the delay, saying it gave Assad and his government the chance to keep killing and prepare from a missile or bomb attack.

"As days go by, more people get killed by the hands of this regime. Further delay for action gives them a chance to change the position of their weapons," said Mohammad Aboud, the Deputy Commander of eastern joint command of the Free Syrian Army.

"According to the intelligence that we have, we know that he exploits this delay to prepare for this strike," Aboud, a lieutenant who defected from Assad's forces, told Reuters.

Foreign Ministers from the Arab League, which blamed Syria for the chemical attack but has so far stopped short of explicitly endorsing Western military strikes, are due to meet in Cairo on Sunday.

Some analysts believe Syria could strike back at its neighbours in retaliation for any Western attack. On Sunday Israeli Prime Minister Benjamin Netanyahu did not mention Syria by name, but said: "Israel is serene and self-confident."

"Israel's citizens know well that we are prepared for any possible scenario. And Israel's citizens should also know that our enemies have very good reasons not to test our power and not to test our might," he said in public remarks to his cabinet before its weekly meeting.

Obama's credibility had already been called into question for not punishing Assad over earlier alleged gas attacks, and he is under pressure to act now that he believes Damascus has crossed what he once described as a "red line".

Some analysts say that if Assad goes unpunished, Iran will feel entirely free to press on with its nuclear programme. Tehran says this is peaceful but the West believes it wants to develop nuclear weapons. Any U.S. failure to act might encourage Israel to take matters into its own hands, say analysts.

"If Obama is hesitating on the matter of Syria, then clearly on the question of attacking Iran - a move that is expected to be far more complicated - Obama will hesitate much more, and thus the chances Israel will have to act alone have increased," Israeli Army Radio quoted an unnamed government official as saying.

Iranian Parliament Speaker Ali Larijani said world opinion stood against any attack on its ally Syria, pointing to the British parliament's rejection of military action.

However, former Iranian President Akbar Hashemi Rafsanjani said the Syrian government had carried out chemical weapons attacks against its own people, the semi-official Iranian Labour News Agency reported on Sunday

In the Vatican City, Pope Francis called for a negotiated solution to the conflict in Syria and announced he would lead a worldwide day of prayer for peace in the country on Sept. 7.

Obama's approach has left in doubt whether the United States will carry through with the military steps that the president has already approved. Backing from congress is by no means assured, with many Democrats and Republicans uneasy about intervening in a distant civil war in which 100,000 people have been killed over the past 2-1/2 years.

Lawmakers for the most part welcomed Obama's decision but looked in no hurry to come back to Washington early from their summer recess, which lasts until Sept. 9.

"PROVOCATION"

Syria and its main ally, Russia, say rebels carried out the gas attack as a ploy to draw in foreign military intervention. Moscow has repeatedly used its U.N. Security Council veto to block action against Syria and says any attack would be illegal and only inflame the civil war there.

"I am convinced that (the chemical attack) is nothing more than a provocation by those who want to drag other countries into the Syrian conflict," Russian President Vladimir Putin said on Saturday.

A group of rebel fighters and activists visited by a Reuters reporter in Aleppo city felt there would now be no U.S. strike. "This is the same old hesitancy that the United States have tortured us with since the beginning of the revolution," one said. (Additional reporting by Yeganeh Torbati in Dubai, Nick Tattersall in Istanbul, Dan Williams in Jerusalem, Philip Pullella in Rome, Ismael Khader in Antakya, Turkey, Denis Dyomkin in Vladivostok and Khaled Yacoub Oweis in Amman; Writing by David Stamp; Editing by Andrew Roche)

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