By Andrei Makhovsky

MINSK, Apr 25 (Reuters) A top U S diplomat warned Belarus today that Washington could impose new sanctions on the former Soviet republic if authorities acted against a planned opposition demonstration.

David Kramer, U S deputy assistant secretary of state, issued the warning a day before Belarus's liberal and nationalist opposition holds a march marking the 21st anniversary of the Chernobyl nuclear disaster.

The United States and European Union last year barred entry to President Alexander Lukashenko and other officials on the grounds that he rigged his re-election to a third term. Both accuse Lukashenko of hounding opponents and closing independent media.

The tomorrow's march is a major opposition rallying point each year as the explosion at the Chernobyl plant, over the border in Soviet Ukraine, affected Belarus more than any other country.

Kramer said improved ties depended on authorities meeting conditions, among then allowing the rally to proceed unimpeded.

''This means taking concrete steps -- the release of all political prisoners, allowing tomorrow's event to be staged freely...,'' Kramer told a news conference after talks with both Belarus's foreign minister and opposition leaders.

''If these steps are not taken, I fear our relations will deteriorate.'' Kramer said Washington could consider a number of punitive measures, among them extending the visa ban to more officials or restricting trade with Belarussian firms. Authorities have given permission for the march, but at a site outside the city centre.

Western countries have also long called for the release of at least 10 people they describe as political prisoners.

These include Alexander Kozulin, who ran in last year's presidential race and was jailed for 5-1/2 years for helping organise big protests in Minsk triggered by the results declaring Lukashenko the winner with 83 per cent of the vote.

Lukashenko, in power since 1994, remains broadly popular and says he has spared his countrymen the upheavals and economic hardships of nearby former Soviet republics.

In his annual state of the nation address yesterday, he called for better ties with the West, but offered no concessions on demands for improved observance of human rights.

He also called for an end to the quarrel with traditional ally Russia over a rise in gas prices and cuts in oil subsidies.

Kramer said Washington had so far heard ''rhetorical statements'' on improving relations but wanted evidence that Belarus was taking the necessary steps.

REUTERS AGL HT2320