FARC says Colombia raid hurts Betancourt release

BOGOTA (Reuters) - A Colombian raid to kill a rebel leader inside Ecuador has seriously damaged attempts to free guerrilla hostages, including ailing French-Colombian captive Ingrid Betancourt, according to a rebel statement.

Colombian military forces last month killed FARC guerrilla commander Raul Reyes by bombing his camp hidden over the Ecuadorean border in an attack that fueled diplomatic tensions and sparked a brief regional crisis.

In a statement posted on the ABP Noticias Web site, which has carried rebel communiques before, FARC commander Ivan Marquez said Reyes's death hurt efforts to reach an accord to free hostages held for as long as 10 years in jungle camps.

The statement was issued on March 20 before President Alvaro Uribe made his latest offer to break a deadlock over a hostage deal as concern grows for Betancourt, a former politician in grave health after six years in captivity.

Reyes was a contact for talks on swapping captives for jailed rebels, with France saying the rebel was its key source inside Latin America's oldest left-wing insurgency for talks over the possible release of Betancourt.

"There will no longer be a meeting with the French delegation over the release of Ingrid," Marquez said in the statement. "As Commander Manuel said: 'They killed Raul and seriously wounded the exchange of prisoners and peace."

Uribe offered cash rewards and reduced jail terms last week to rebels who surrender and hand over hostages. Former rebels could also be allowed to leave for France and others will be freed from jail if Betancourt is released, he said.

Marquez, a member of the FARC's seven-member secretariat, was in Venezuela at the end of last year for talks with President Hugo Chavez, who has managed to broker the release of six FARC hostages.

But attempts to reach a broader deal to free Betancourt, three American contractors and dozens of politicians, police and soldiers held for years, have been stymied over a rebel demand Uribe pull back troops to create a safe haven.

The FARC, once a peasant army but now engaged in cocaine trafficking, wants the government to cede a space the size of New York City to facilitate talks. But Uribe says this will allow the guerrillas to rearm in a region rife with drug and arms trafficking.

(Reporting by Patrick Markey in Bogota, editing by Philip Barbara)