* Opposition Renamo party disrupts traffic in central region
* Renamo wants to weaken ruling party's grip on power
* High costs also deter tourists but economy is booming
By Marina Lopes
ILHA DE BAZARUTO, Mozambique, July 4 (Reuters) - With its picture-postcard Indian Ocean beaches, unspoilt coral reefs and laid-back southern African charm, Mozambique has been slowly putting its civil war past behind it and emerging as an attractive, albeit slightly chaotic, tourist destination.
But the threat of renewed conflict in a country still haunted by 16 years of war in which a million people died has dealt a major blow to the tourism drive.
Last month, the opposition Renamo party, a former guerrilla movement that took part in the 1975-1992 war, said it would disrupt traffic on roads and railways in the southern African country's central belt, its traditional stronghold.
In the ensuing 10 days, gunmen shot up several trucks and buses, killing at least two people and forcing vehicles plying the former Portuguese colony's main north-south highway to travel in convoys with military escorts.
Foreign embassies have issued warnings against all but essential travel through the region, especially near the town of Muxungue, 650 km (400 miles) north of Maputo, where tensions between Renamo and security forces flared in April.
Many visitors, local and foreign, are heeding the advice to stay away, even at the start of the busy Mozambican winter holiday period.
"If you're coming to us from Maputo by car you have to pass by Muxungue. There is no way around it," said Sitoi Andaq, a receptionist at the Cuacua Lodge, which lies far to the north on the Zambezi river.
"This is normally one of our busiest weeks and yet the numbers have reduced significantly," he said.
Even on the south side of the trouble spot, on the mainland or the sun-drenched islands of the Bazaruto Archipelago, hoteliers are feeling the pinch.
"I have had cancellations," said Peggy Warrack, the South African owner of Casa Berry, an upmarket hotel in Tofo, home to what are widely regarded as Mozambique's best tourist beaches.
"We are all concerned about it. Who wouldn't be? As it is, it is expensive to run a business in Mozambique, plus all the revenue we are losing because of this situation."
In Maputo, Mozambique's seaside capital where Renamo and the ruling Frelimo party have held two months of fruitless talks about political reform, especially Frelimo's de facto control of the election commission, there are few signs of the most serious tensions between the civil war foes in nearly two decades.
The champagne corks are still popping in the city's ritzy bars and, amid the decaying colonial grandeur, luxury hotels continue to spring up - the most visible sign of a flood of foreign investment pouring in to Mozambique's vast northwest coal fields and offshore natural gas deposits.
"Mozambique is one of the fastest-growing economies in Africa and we do believe that tourism is one of the main factors that will move this country into the world market," said Marco Veiga, manager at the Southern Sun Hotel, now undergoing a $30 million expansion.
The government, run by the formerly Marxist but now broadly free-market Frelimo, insists it has a handle on the security situation, and travel agencies are telling tourists to stay in the south or avoid the danger zone by flying to the north.
"We are working to win back the confidence that our tourists have always had in us. That is why we are working to maintain peace and ensure that their leisure and enjoyment are not interrupted," Tourism Minister Carvalho Muaria told Reuters.
Renamo, founded around independence with the help of white-run Rhodesia, says it 'laments' the damage being inflicted on one of the world's poorest countries but argues its wider aim - to ease Frelimo's grip on power - is worth the temporary pain.
"We want to see more investors coming into Mozambique but the current moment of political tension does not permit this," Renamo spokesman Fernando Mazanga said. "That is why we want to accelerate the talks with the government."
The violence is the last thing Mozambique's tourism chiefs need on top of the usual headaches and costs of operating in a sleepy African backwater where nearly everything apart from beer and basic food has to be imported.
At the top end of the market, high-end resorts set on sun-drenched islands and surrounded by turquoise waters cater for jetsetters willing to pay $500 a night or more for a private slice of paradise.
By regional standards, the costs are high, not least because of the strength of the metical, another by-product of the billions of dollars flowing into the resources sector.
In 2011, the currency was the world's strongest performer against the dollar and has barely wavered this year while currencies such as South Africa's rand have fallen sharply on the prospect of the U.S. Federal Reserve winding down its economic stimulus measures.
Even before the Renamo threats, the costs and lack of reliable infrastructure were causing many tourists to overlook Mozambique, which attracts fewer than 2 million visitors a year - less than Zimbabwe or Botswana and a fraction of the 9.2 million that went to South Africa last year.
"Mozambique looks amazing in pictures but when you try to organise a trip there, it becomes a nightmare," said Jessica Hughes, a translator from London.
"It's expensive, flights are rare, and when you call resorts listed online or in your guidebook, it seems they change owners nearly every year so you can't reach anybody."
For some, however, the absence of hotels and coach-loads of visitors amid the pristine dunes remains something to cherish.
"I'm thinking about moving," said Gustavo Sindiar, an environmental protection officer, gazing out over kilometres of undisturbed sea and sand near Bazaruto. "It is getting way too crowded here," he joked. (Additional reporting by Agnieszka Flak; Editing by Ed Cropley and Gareth Jones)