Colombia says troops kill local rebel commander

BOGOTA (Reuters) - Colombian troops killed a FARC rebel commander accused of ordering extortion and bombings around Bogota, including small blasts at Carrefour supermarkets and Blockbuster stores, authorities said on Monday.

The death of Jose de Jesus Guzman, alias "Gaitan", during weekend combat was the latest strike against the weakened Revolutionary Armed Forces of Colombia, known as the FARC, Latin America's oldest left-wing insurgency.

Guzman, a 26-year FARC veteran, was recently entrusted with reorganizing the rebels' urban militias and had been an ally of top FARC commander "Mono Jojoy", the presidential office said.

Once a peasant army of 17,000 controlling large portions of Colombia, the FARC have been reduced to between 7,000 and 10,000 combatants and forced back into remote jungles and mountains to evade military assaults and bombardments.

The FARC lost three top commanders last year, suffered from desertions and military setbacks. A surprise army operation in July rescued 15 of its key political hostages, including French-Colombian Ingrid Betancourt and three Americans.

Ten members of Guzman's "Antonio Narino" guerrilla unit were killed during combat last week in Cundinamarca province near Bogota and one of the group's key kidnapping operators was captured by the army, the military says.

Officials blamed a FARC extortion network for a recent bombing on a Bogota Blockbuster store that killed two people. Blockbuster stores and the Carrefour chain have been hit with small explosions or firebombs police link to extortion.

A recent security report said the FARC could try to increase urban attacks to pressure the government while trying to regain political space with hostage releases. Analysts say rebels are turning increasingly to extortion as kidnapping becomes more difficult under military pressure.

(Reporting by Patrick Markey in Bogota)