* New government measure on illegal mining expected
* Protests leader heading to Lima for dialogue
LIMA, March 15 (Reuters) - Wildcat gold miners in southeastern Peru suspended a protest on Thursday as the government pledged to incorporate the vast sector into the formal economy the day after three people died in a clash with police.
The government is trying to calm protesters who oppose President Ollanta Humala's crackdown on illegal mining in the restive Madre de Dios region. It says wildcat mining harms the environment.
One of the protest organizers said there would be no further demonstrations at least until Monday, when he would participate in talks with the national government in the Peruvian capital.
"We have lifted the protest until we have dialogue in Lima," Luis Otzuka, head of the Federation of Madre de Dios Miners, said on state television.
Three protesters were killed and 32 people wounded on Wednesday, including seven policemen, in the deadliest demonstration of Humala's young presidency.
Ending the protest is key for Humala, who has vowed to resolve some 200 disputes nationwide over natural resources in one of the world's top metals exporters.
More than 100 people died in environmental protests during former President Alan Garcia's five-year term while four have died in protests since Humala took office in July.
The government said it would announce a series of decrees aiming to bring the 40,000 people in Madre de Dios involved in the black-market trade into the formal economy.
"With the decrees that will be approved today, we are going to ease the process of formalization a bit so these (informal) miners are incorporated," Prime Minister Oscar Valdes said on local radio.
The government had previously seized and burned dredging equipment and declared all unauthorized mining to be illegal and punishable with jail time to curb activity it says pollutes rivers with mercury, turns vast swaths of jungle into desert and provides no economic benefit to the poor jungle region.
"Illegal miners don't pay taxes, they don't provide quality jobs and the gold goes to other countries as contraband," Valdes said.
Even as it opposes wildcat mining, Humala, a former leftist who has governed from the center since taking office, has encouraged the construction of big, modern mines - like U.S.-based Newmont Mining's $4.8 billion Conga gold project.
That project has been delayed by local community opposition over concerns it would replace a series of alpine lakes in the northern region of Cajamarca with artificial reservoirs.
Peru is a leading producer of copper, zinc, and silver. It is the world's sixth-largest gold producer. Madre de Dios produces about 19 million fine grams of gold per year, about 10 to 15 percent of Peru's annual output.