* Final day of NATO summit gets underway
* Spain's priorities differ from focus on Russia, China
* Past efforts for a southern strategy failed
By Belén Carreño and Inti Landauro
MADRID, June 30 (Reuters) - Spain will urge fellow NATO allies to consider a bigger role for the alliance in North Africa and the Sahel at a summit in Madrid on Thursday, and Spain's foreign minister said an intervention in Mali should not be ruled out.
NATO has little appetite for such steps, diplomats say, but as it undertakes the largest scaling-up of its defences since the Cold War to the east, allies such as Spain and Italy worry threats on the southern border risk being ignored.
NATO's 30 leaders will hold a final summit session, focused on the south, on Thursday morning, after almost two days of talks dominated by Russia's war in Ukraine.
Spain's Foreign Minister Jose Manuel Albares said he did not rule out a NATO intervention in Mali if needed, after the alliance's summit statement cited terrorism among the "hybrid threats" that hostile powers can use to undermine its stability.
"If it were necessary and if it posed a threat to our security, we would do it," he told local radio station RNE. "We don't rule it out."
Western powers are concerned about a spike in violence in Mali, where the country's ruling military junta, backed by Russian private military contractor Wagner Group, is battling an Islamist insurgency that spills into neighbouring countries in the African region known as the Sahel.
France, whose military policy has long been focused on NATO's south, said in February that it would pull out 2,400 troops first deployed to Mali almost a decade ago, after relations with the junta turned sour.
In January 2020, then U.S. President Donald Trump tried to expand the North Atlantic Treaty Organization to include Middle Eastern nations, arguing that European armies should do more to fight Islamist militants. The proposal did not gain support.
At Spain's urging, with support from Italy, NATO's new, 10-year master document, the "strategic concept" also cites terrorism and migration as elements to monitor, and points to the southern flank as a new source of risk to stability.
SPAIN'S 2029 GOAL
NATO was created in 1949 to defend against the Soviet Union and is enjoying a renewed sense of purpose following Russia's Feb. 24 invasion of Ukraine, looking mainly eastwards.
The alliance branded Moscow the biggest "direct threat" to Western security on Wednesday at the summit and agreed plans to modernise Kyiv's beleaguered armed forces.
It also invited Sweden and Finland to join and pledged a seven-fold increase from 2023 in combat forces on high alert along its eastern flank.
The U.S.-led alliance also faces a slew of fresh demands, from countering Russia and China to developing its defences in space and on computer networks.
In a sign of Spain's determination to play a bigger role after decades of some of the lowest defence spending in NATO, Prime Minister Pedro Sanchez said Madrid will eventually meet the alliance's target, albeit five years later than NATO's goal.
"The government is committed to raising our defence budget to close to 2% of GDP by 2029," he told national TV station TVE. All NATO member countries committed in 2014 to move towards spending on defence the equivalent of 2% of GDP by 2024.
(Additional reporting by Sabine Siebold, Humeyra Pamuk, Aislinn Laing, Andrea Shalal, writing by Robin Emmott)