Mexican rebels reject direct talks with government

MEXICO CITY (Reuters) - A Mexican rebel group that bombed energy pipelines last year rejected on Monday direct talks with the government but left open the possibility of negotiations through a group of mediators.

President Felipe Calderon's conservative government agreed last month to talks with the Popular Revolutionary Army, or EPR, which disrupted oil and gas supplies last July and September, if the group agreed to swear off future violence.

"The conditions simply don't exist to sit down face to face," the EPR said in a statement, adding that the government was backed by right-wing extremists in Mexico as well as U.S. President George W. Bush.

The group is demanding the return of two missing activists it says are being held and tortured by authorities, an accusation the government denies.

Calderon condemned the EPR's decision. "To me this is deplorable. However, the Mexican government, my government, will always be open to dialogue," he told a news conference.

But the rebels said they were optimistic about the recent formation of a five-member panel that it said could mediate talks. The panel is mainly made up of left-leaning public figures and it is not clear if the government would back its mediation efforts.

The EPR burst into public view in the 1990s during a rally in the poor southern state of Guerrero. It claims hundreds of members across Mexico but after lethal ambushes on rural police and army bases, the group remained quiet for nearly a decade.

The rebels returned to the spotlight in 2007 with the pipeline attacks directed at state-owned oil monopoly Pemex.

(Reporting by Miguel Angel Gutierrez; Editing by Kieran Murray)