By Joe Brock
JOHANNESBURG (Reuters) - The United States said on Monday it was "deeply concerned" after Lesotho's former army chief was shot dead last week, an incident that risks sparking instability in a small mountainous kingdom of strategic importance to South Africa.
Former Lesotho Defence Force commander Maaparankoe Mahao was shot dead by soldiers in his village home on June 25, according to local media reports. Lesotho's government and military spokesmen did not respond to requests for comment.
Mahao, an ally of Lesotho's former leader Thomas Thabane, is a bitter rival of current army chief Tlali Kamoli.
It was Thabane's decision in August last year to sack Kamoli and replace him with Mahao that led to an attempted coup, forcing Thabane to flee to South Africa.
Thabane then lost a tight election in March to current Prime Minister Pakalitha Mosisili, who promptly reinstated Kamoli as leader of the armed forces.
Western diplomats and security analysts are concerned Mahao's death could spark a security crisis in a country of 2 million people which has been hit by several coups since independence from Britain in 1966.
"This latest - and most tragic - example of abuses within the Lesotho Defence Force highlights the urgent need for security sector reform," John Kirby, U.S. State Department spokesman, said in a statement.
Lesotho's economy is reliant on a preferential trade agreement with the U.S. that supports its textile industry. The U.S. could drop Lesotho from the trade deal if the security crisis deepens, putting tens of thousands of jobs at risk.
South Africa, which surrounds Lesotho, is concerned that widespread job losses could result in more migration, piling pressure on Africa's most developed economy.
"The murder last week ... has the potential to push political tensions in Lesotho back toward boiling point," said Gary van Staden, political analyst at NKC African Economics.
"The politics of Lesotho continue to be intertwined with its raucous security cluster infighting. This dynamic poses a long-term threat to the country's political stability."
Apart from textile exports and a slice of regional customs receipts, Lesotho's other big earner is water piped to South Africa, making it of strategic importance to Pretoria.
South Africa's Deputy President Cyril Ramaphosa has acted as mediator throughout Lesotho's latest political turmoil.
South African Defence Minister Nosiviwe Mapisa-Nqakula met with Lesotho government officials in the capital Maseru over the weekend, according to state media reports, after President Jacob Zuma launched a fact-finding mission following Mahao's death.