Ecuadorian president vows he won't yield to protesters

QUITO, Ecuador, Mar 16 (Reuters) Ecuadorean President Alfredo Palacio vowed he would not yield to Indian protesters who are demanding that he end free-trade talks with the United States and accused them of trying to topple his government.

Police fired tear gas to disperse thousands of Indians who have blocked roads with burning tires and rubble in eight central provinces since Monday to press their demands.

''The free-trade deal is in the middle of negotiations and the Ecuadorean government cannot assume any compromise to sign it or not while there are still issues to be resolved,'' Palacio said in a prerecorded statement broadcast late yesterday.

The protests were a ''political imposition aimed to dissolving the nation,'' Palacio said.

However, he promised to revive a plan to call a referendum to rewrite the constitution as a way out of the political crisis. His previous attempts at reforms have been repeatedly stymied by Congress.

Interior Minister Alfredo Castillo resigned after making remarks in support of the protesters, who pose the biggest challenge to Ecuador's stability since Palacio took office 10 months ago after Congress fired his predecessor.

''The country is at a critical situation and we are headed to anarchy,'' said the president of Congress, Wilfredo Lucero.

Three presidents have been toppled by popular and congressional unrest in Ecuador in less than a decade.

The protests are starting to hurt businesses and the economy. Basic food deliveries like corn, potatoes and milk have been disrupted in the central provinces where traffic is blocked and Ecuadorean flower farmers are struggling to transport their shipments.

Stick-wielding protesters fought brief skirmishes with security forces and at least one person was injured by a tear gas canister, a police spokesman said.

The demonstrations have gathered force as hundreds of Indians walked down from hamlets in the Andes mountains to join the blockades. They say a trade deal will put them at disadvantage with U S farmers and disrupt their culture.

Government officials have promised Indian leaders a series of meetings this week to discuss the impact of the trade pact before negotiations resume in Washington on March 23. But protesters said the proposals were not enough and vowed to continue with the demonstrations.

Palacio has struggled with a series of protests and strikes as presidential election looms in October. Last week, oil contract workers at state oil firm Petroecuador went on strike and briefly curbed the country's vital crude production.

Activists are also demanding the immediate expulsion of Occidental Petroleum Corp., which the government accuses of improperly transferring an oil field to another company.

REUTERS DKS DS1057