UPDATE 5-Trump balks at government funding bill, raising shutdown fears

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WASHINGTON, Dec 20 (Reuters) - U.S. President Donald Trump on Thursday told Republican congressional leaders he will not sign a government funding bill because it fails to include enough funding for border security, a decision that increased the odds that parts of the federal government would shut down on Friday.

Trump announced his decision during a closed-door meeting at the White House with a group of House Republican leaders, who afterward told reporters that they would try to craft a version of the legislation including $5 billion that Trump had demanded to build a wall on the U.S. border with Mexico.

"We want to keep the government open but we also want to see an agreement that protects the border," House Speaker Paul Ryan said.

Earlier on Thursday, Trump had grumbled on Twitter that a version of the bill passed by the Senate on Wednesday failed to include the money for the wall, his signature campaign promise. But he had stopped short of threatening to veto the legislation, leaving open the possibility there would not be a shutdown.

When rank-and-file House Republicans met on Thursday to discuss their strategy, they were confused about where Trump stood. Ryan abruptly canceled a news conference as members grappled over issues and then the leaders were called for an unscheduled White House meeting.

"The president informed us that he will not sign the bill that came up from the Senate last evening because of his legitimate concerns for border security," Ryan said before returning to the Capitol to work on a amendment to the Senate bill.

Last week in a White House meeting with Democratic congressional leaders Trump had said he would be "proud to shut down the government for border security."

The Senate bill approved on Wednesday had provided a seven-week extension of existing funds for agencies responsible for federal law enforcement activities, airport security screenings, space exploration and farm programs, to name a few.

Representative Steve Scalise, the No. 3 Republican in the House, told reporters that his members also would try to add funding for states hit by recent natural disasters.

House Democratic Leader Nancy Pelosi has said including border wall money in the bill would be a "non-starter" for her members. They were, however, open to the disaster aid, she said.

Hard-right conservative lawmakers had urged Trump to push for border wall funding now, arguing that it would be impossible to get once Democrats taking control of the House on Jan. 3.

"He (Trump) campaigned on the wall," Republican Representative Mark Meadows said. "It was the center of his campaign ... the American people's patience is running out."

Meantime, Trump administration officials were looking for ways to build the wall by reassigning money already doled out to U.S. agencies for other projects.

The White House has not provided details of that effort but leading Democrats have warned that shifting funds around in such a way would have to be approved by Congress. (Reporting by Richard Cowan, Steve Holland and Ginger Gibson; additional reporting by Lisa Lambert and Susan Heavey; Writing by Roberta Rampton; editing by Michael Perry and Bill Trott)