(Adds details from army, context on armed groups)

TUNIS, Aug 29 (Reuters) - Islamist militants killed three Tunisian soldiers and wounded seven others on Monday, opening fire on them with rifles and rocket propelled grenades after their patrol hit anti-tank landmines, an army spokesman said.

Jihadists use the remote, mountainous region along the Algerian border as a base and the military has been hunting them down in the rugged terrain with patrols and air strikes on suspected training camps.

Army spokesman Belhassen Ouslati said the three soldiers had been killed in the landmine blast and that clashes were continuing after the ambush in the Mount Sammama area.

Since the 2011 uprising against autocrat Zine El-Abidine Ben Ali, Tunisia's democracy has been held up as a model for a region wracked by violence and instability. But Islamist militants are one of the key challenges for the new Prime Minister Youssef Chahed, who officially took office on Monday.

A local Al Qaeda affiliate, Okba Ibn Nafaa, has been based in the Mount Chaambi range. Some of its leadership is Algerian while some foreign militants fled there after the French intervention in Mali.

Militants occasionally carry out attacks on army patrols and checkpoints in the remote areas around Mount Chaambi, and occasionally raid local homes for food and supplies.

Islamic State has also drawn several thousands Tunisian jihadists to its ranks in Syria, Iraq and more recently in neighbouring Libya. Tunisian authorities are concerned about returning jihadist carrying out attacks at home.

Three major attacks claimed by Islamic State in Tunisia last year badly hit the country's tourism industry just as the government tries to embark on an ambitious economic reform programme to cut public spending and create jobs.

(Reporting by Tarek Amara; Writing by Patrick Markey; Editing by Toby Chopra) ((tarek.amara@thomsonreuters.com;))