UPDATE 1-Colombia says troops kill guerrilla commander

(Adds four soldiers killed, union leader’s arrest)

BOGOTA, March 2 (Reuters) - Colombian troops killed a FARC guerrilla commander accused of ordering extortion and bombings around Bogota, including small blasts at supermarkets and video stores, authorities said on Monday.

The death of Jose de Jesus Guzman, alias “Gaitan”, during weekend combat was the latest strike against the weakened Revolutionary Armed Forces of Colombia, known as the FARC, Latin America’s oldest left-wing insurgency.

Guzman, a 26-year FARC veteran, was recently entrusted with reorganizing the rebels’ urban militias and was a close ally of the top FARC commander Jorge Briceno, alias “Mono Jojoy”, the presidential office said.

Once a peasant army of 17,000 controlling large portions of Colombia, the FARC have been reduced to between 7,000 and 10,000 combatants and forced back into remote jungles and mountains to evade military assaults and bombardments.

The FARC lost three top commanders last year, suffered from desertions and military setbacks. A surprise army operation in July rescued 15 of its key political hostages, including French-Colombian Ingrid Betancourt and three Americans.

Ten members of Guzman’s “Antonio Narino” guerrilla unit were killed during combat on Friday in Cundinamarca province near Bogota and one of the group’s key kidnapping operators was captured by the army, the military says.

Officials blamed a FARC extortion network for a recent bombing on a Bogota Blockbuster BBI.N store that killed two people. Blockbuster video stores and the Carrefour CARR.PA supermarket chain have been hit with small explosions or firebombs police link to extortion.

A recent security report said the FARC could try to increase urban attacks and extortion to pressure the government while trying to regain political space with hostage releases.

Despite their defeats, the guerrillas remain a powerful force in some rural areas. The army said four soldiers were killed on Monday in an attack by FARC fighters in a mountainous part of the Cauca region, a key drug trafficking route.


During last week’s combat in Cundinamarca, troops also detained a trade union leader in the rebel camp, the government said on Monday, demanding an explanation from the country’s CUT labor federation.

“The trade union movement needs to come out, for the good of the trade union movement ... and clarify the CUT’s position in relation to this situation,” Social Protection Minister Diego Palacio said. “What was this man doing there?”

He said the arrested union leader had been assigned personal bodyguards and an armored car as part of a government protection program for unionists -- frequent targets in Colombia’s four-decade-old armed conflict.

The incident comes as conservative President Alvaro Uribe seeks to revive a U.S. free-trade deal that was blocked by U.S. Democrats because of concern over violence against union leaders in the South American country.

Colombian labor leaders oppose the trade pact, saying it does not do enough to guarantee their rights and would only benefit a wealthy elite. (Reporting by Patrick Markey and Luis Jaime Acosta, writing by Helen Popper, editing by Anthony Boadle)