Chavez seen behind unrest in Peru

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By Kelly Hearn

QUILLABAMBA, Peru | A national strike by thousands of rain-forest Indians is spawning accusations of a proxy war involving Venezuela and an emboldened peasant movement seeking to undermine Peru's pro-U.S. president.

For more than two months, thousands of natives have been protesting land reforms issued by President Alan Garcia. The laws -- required by a U.S.-Peru Free Trade Agreement -- open vast tracts of rain forest to private energy and agriculture investment.

In April, natives angered by the new laws donned war paint and grabbed spears, overran roads and rivers, seized control of jungle oil facilities and blocked rural airports.

Mr. Garcia initially said that the protesters would not force his hand. But he backtracked after a June 5 confrontation in the oil-rich Amazon region of Bagua left more than 30 police and protesters dead.

Congress voted down two of the laws on June 18, handing Mr. Garcia a defeat and the natives a new sense of power.

Mr. Garcia, who appoints the prime minister, also has agreed to name a replacement for Prime Minister Yehude Simon. On Friday, Mr. Simon said he planned to step down this week in response to criticism of the government's handling of the protests, Reuters news agency reported. Mr. Simon had indicated in mid-June that he would resign, but had not set a date.

Human rights groups say dozens of protesters were killed or are missing and are not accounted for in the official toll.

Opposition parties have blamed Mr. Simon for the violence. He was appointed in October after a corruption scandal led to a major government reshuffle.

His resignation would force the entire Cabinet to offer to step down, but Mr. Garcia is not expected to replace heads of key departments, such as the Finance Ministry. Mr. Garcia has not yet indicated who would replace Mr. Simon.

The conflict has threatened to slow Mr. Garcia's push to attract billions of dollars in foreign investment.