UPDATE 3-Peru roiled by tension after deadly Amazon clashes

* Deadliest unrest of President Garcia's term

* 30 indigenous protesters dead, 22 security forces

* Indians with wooden spears dig in at blockades (Updates death toll, adds quote)

By Marco Aquino

YURIMAGUAS, Peru, June 6 (Reuters) - Indigenous protesters and Peru's army refused to back down and a truce looked distant on Saturday, after two battles in the Amazon jungle killed some 50 people in the worst crisis of President Alan Garcia's term.

Protesters said 30 of their own have died and the government said 22 security forces have perished in two days of clashes over the president's drive to bring foreign companies to the rainforest to open mines and drill for oil.

The bloodshed has prompted widespread calls for Garcia's prime minister to quit, underscored divisions between elites in Lima and the rural poor and threatened to derail the government's push to further open up Peru to foreign investors [ID:nN0631113].

Thousands of Indians with wooden spears dug in at blockades on Saturday along remote Amazon highways, vowing to keep protesting if police did not halt efforts to break up their demonstrations.

About 10 police officers held by protesters were killed and another two dozen were freed by troops that moved in to end a hostage crisis, National Police Chief Miguel Hidalgo told RPP radio on Saturday. He said seven hostages were missing.

BATTLE AT 'DEVIL'S CURVE'

In an incident that triggered the hostage stand-off, 11 police died on Friday when they broke up a roadblock, about 870 miles (1,400 km) north of Lima along a stretch of highway known as "Devil's Curve," the government said.

Thirty protesters died at the "Devil's Curve" clash, Champion Nonimgo from AIDESEP, Peru's leading indigenous rights group, said on Saturday. The government said nine protesters died.

"We are talking about more than 30 indigenous deaths so far," Nonimgo said.

The army said it would impose widespread curfews in the Amazon starting on Saturday afternoon.

Garcia blamed leftist political opponents for the violence and defended the use of force.

"Shame on those politicians who can't win elections so they get together irrational groups to do what they did yesterday," Garcia said on Saturday.

Tribes, worried they will lose control over natural resources, have protested since April seeking to force Congress to repeal new laws that encourage foreign mining and energy companies to invest billions of dollars in the rain forest [ID:nN06294730].

"We are not going to give up until they reverse these laws that will damage us. They want to take away our lands and forest and make our traditions disappear," said Luis Huansi, a leader of the Shawi tribe from the Loreto region, at a highway blockade between the Amazon towns of Tarapoto and Yurimaguas.

Men, women and children from the subsistence farming region were blocking the highway. Some were dressed in long red tunics, wore headbands and carried wooden spears. Families have set up tents of plastic sheeting along the roadside.

DEVELOPMENT LAGS

Defense Minister Antero Flores said security forces had regained control of an oil pumping station of state-owned Petroperu, which protesters had threatened to set ablaze.

Garcia, whose approval rating is 30 percent, is especially unpopular in the Amazon, where development has lagged.

Critics say he has not done enough to lower the poverty rate from 36 percent and that economic boom times before the current downturn failed to reach the poor.

They also say his policies favoring free markets and foreign investment mainly benefit urban elites.

Indigenous groups are upset over laws passed last year as Garcia moved to bring Peru's regulatory framework into compliance with a free-trade agreement with the United States.

After Friday's violence, members of Garcia's Cabinet accused protesters of being inflexible and refusing to negotiate and said they would impose curfews.

Indigenous leaders were outraged and said Garcia's allies acted in bad faith when they blocked a motion in Congress on Thursday to open debate on a law that tribes want overturned.

"We don't have guns, we have only these spears," said Huansi, shaking his spear. (Writing by Terry Wade and Fiona Ortiz; Editing by Xavier Briand)