* Three journalists face retrial
* Minister says presidential pardon can't be excluded
* Improving ties between Egypt, Qatar may help three
By Edmund Blair
NAIROBI, Jan 13 (Reuters) - Egypt's President Abdel Fattah al-Sisi could still pardon three jailed Al Jazeera journalists who are now facing a retrial if he deems it appropriate, the country's foreign minister said on Tuesday.
Canadian-Egyptian Mohamed Fahmy, Egyptian Baher Mohamed and Australian Peter Greste were sentenced last June to seven to 10 years for spreading lies to help a "terrorist organization" - a reference to Egypt's outlawed Muslim Brotherhood.
Sisi said in November the issue of a presidential pardon was under discussion. Egypt's High Court ordered a retrial of the men on Jan. 1.
Asked about a presidential pardon, Foreign Minister Sameh Shukri said: "All avenues are on the agenda in the context of the president's constitutional and legal rights."
"So in principle that is also an avenue that might be pursued but that is the prerogative of the head of state when he deems it necessary or appropriate to do so," he told Reuters during a visit to the United Nations' Africa headquarters in Nairobi.
He said the fate of the three, who include Greste, a Nairobi-based journalist who was detained on assignment in Cairo, now depended on the retrial process.
About a dozen Kenya-based journalists staged a small protest against the jailings in front of the minister in the U.N. compound, taping their mouths shut to reflect their view that Egypt was stifling free speech.
Rights groups and Western governments have criticized the detentions. Al Jazeera says the trial was flawed and has demanded their release.
Shukri said a decision by the Doha-based channel to halt broadcasts last month of its Egypt-focused operation Al Jazeera Mubasher Misr, whose content angered Cairo, would help improve strained ties with Qatar.
"You could say it is a contributory factor," he said, although he did not mention other specific steps needed.
Qatar was one of the main supporters of Egypt's President Mohamed Mursi and his Brotherhood during their year in power before his government was ousted by the army in July 2013.
Egypt has accused Al Jazeera of being a mouthpiece for the now-banned Brotherhood, which the channel denies.
Sisi met a Qatari envoy last month, the latest step in diplomatic efforts led by Saudi Arabia to help patch up ties.
"The efforts of Saudi Arabia, the recent emissary (from Qatar) ... his meeting with the president, provide an opportunity for the normalization of relations," Shukri said, without saying when Egypt might send an ambassador back to Doha. (Editing by Gareth Jones)