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UPDATE 2-Peru's Congress suspends divisive Amazon land laws

* Land-use laws sparked deadly Amazon clashes

* Congress vote seen as stop-gap measure

* Local leaders vow to keep protesting (Recasts, adds byline, quotes, details)

LIMA, June 10 (Reuters) - Peru’s Congress on Wednesday suspended two land-use laws that sparked clashes in which 60 people were killed last week, but indigenous people opposed to development in the Amazon jungle vowed to keep protesting.

The violent clashes between police and protesters has become a major political crisis for President Alan Garcia, who decreed the two land laws using special powers to implement a free-trade pact with the United States.

They outline a plan for how to regulate investment in the Amazon, and protesters say they encourage energy and mining firms to invest billions of dollars in jungle projects.

Indigenous tribes fear losing control of natural resources while several other recent presidential decrees on foreign investment remain in place.

Protesters have been blocking roads and waterways since April to pressure the government to scrap the laws and they vowed to continue demonstrations despite Wednesday’s vote, which did not define how long the suspension would last.

“As indigenous people, a suspension doesn’t sit well with us. ... The strike continues,” said Efrain Pizango, a tribal leader at a roadblock near Yurimaguas, some 932 miles (1,500 km) north of Lima.

Indigenous groups and trade unions have also called for a general strike on Thursday and plan to march to Congress.

Last week’s bloodshed exposed the division between Peru’s wealthy elites in Lima and the rural poor, and threatened to derail the government’s push to further open the mineral-rich country to foreign investment.


Wednesday’s vote, seen as a stop-gap measure to give Congress more time to agree on a more permanent solution, suspends two separate land-use laws.

Protesters say one of the laws would free up some 111 million acres (45 million hectares), or roughly 60 percent of Peru’s jungles, for potential development.

The other would allow companies with concessions to obtain changes in zoning permits directly from Peru’s central government, potentially giving them a way to extract resources without having to win the approval of local communities.

Opponents of the laws say they were passed without prior consultation, violating international indigenous rights pacts.

Lawmakers in the capital said they voted in favor of the suspension to avert further unrest.

“Relinquishing our position is not the same as giving up our principles. We do not want any more violence,” said Keiko Fujimori, a leading Congresswomen who, like Garcia, is fervent believer in free trade.

Days after the deadly clashes, protesters and police continued to differ over exactly what happened.

“In situations like this, we need a third party to present an objective, almost quantifiable version of the events,” said Jose Baraybar, a leading forensic anthropologist in Peru.

Rights groups and local leaders say up to 40 indigenous people died in last week’s clashes, but the government puts the total at 33 -- 24 police and nine civilians.

U.S.-based Amazon Watch, an environmental and human rights group, has accused the Peruvian government of taking bodies from hospitals and burning them, or throwing them in rivers.

“It’s clear there is a lack of faith in the government from a number of fronts,” Baraybar said. (With additional reporting by Marco Aquino in Yurimaguas; editing by Todd Eastham)