Bolivia's Morales arrests rival, still wants talks

LA PAZ (Reuters) - Bolivian troops on Tuesday arrested an opposition governor blamed for 15 deaths during days of political violence that shook the country as President Evo Morales and his opponents tried to negotiate a way out of the crisis.

Leopoldo Fernandez, the rightist governor of Pando province in Bolivia's far north, was detained by troops in the city of Cobija and bundled onto a plane to La Paz, where Morales supporters waited with banners reading "Fernandez, murderer."

The leftist government accuses Fernandez of ordering a massacre of pro-Morales peasants last Thursday, in which officials say 15 people died. Previously the government had given a higher number.

An impoverished, unstable country with large natural gas reserves, Bolivia is split between supporters of Morales' socialist reforms and a minority who say he is trying to turn the country into another Cuba.

"We hope by the end of the day to have agreed on the points that have been discussed up until now," Morales told a news conference at the presidential palace. "This agreement can serve as a foundation to keep talking."

Morales is Bolivia's first indigenous president who was confirmed by a landslide in an August recall election.

Mario Cossio, the governor of natural gas-rich Tarija province who represents a clutch of rightist opposition governors, left talks at the government palace without speaking to reporters.

Before Fernandez's arrest, Cossio said he expected to sign an accord with Morales, setting out the points for formal negotiations. It was not immediately clear how the arrest would affect talks.

MARTIAL LAW

Prominent opposition leader Branko Marinkovic, who works closely with the governors, said negotiations were still on despite the arrest. He said they want Morales to lift martial law in Pando but did not say that was a condition for talks.

Eastern Bolivia, where rebel governors lead a movement for autonomy from the central government and demand a greater share of the country's energy revenue, erupted in anti-Morales protests last week.

Tensions had been rising since August when Morales and the governors who oppose him were all confirmed in their posts in recall votes, empowering them to intensify their positions.

The protesters attacked energy facilities -- forcing Bolivia to briefly halt its natural gas exports -- blocked roads, and stormed dozens of government buildings.

The worst violence occurred near the border with Brazil in the sparsely populated Pando province, where the government declared martial law and deployed troops on Friday.

Officials said 15 people died in rural Pando in an incident on Thursday, but it was not clear whether the figure included only pro-Morales people, or also his opponents. Two more people died in Pando's capital, Cobija.

Bolivia's attorney general has opened an investigation into accusations of genocide against Fernandez over the deaths.

Defense Minister Walker San Miguel said Fernandez had been arrested for contravening the rules of martial law.

"The governor of Pando ignored martial law. He organized two protests," San Miguel said. "That is not allowed."

Morales' hand was strengthened when South American presidents held an emergency summit in Chile on Monday to call for an end to violent protests in Bolivia and condemn any coup attempts against him.

The army says it backs Morales, who has accused his opponents of planning a civilian coup against him.

The presidents at the summit called on the rebel governors to end the occupation of central government offices as a condition for formal talks.

Bolivia, the poorest country in South America, has become increasingly polarized since Morales took office in early 2006 vowing to give the country's Indian majority more power.

Morales, an ideological ally of Venezuelan President Hugo Chavez, argues his new constitution has been designed to stamp out discrimination against Indians, who he says have been neglected by previous pro-market governments.

(Additional reporting by Ray Colitt in Santa Cruz; Writing by Simon Gardner; Editing by Chris Wilson)