Pubdate: Sun, 04 Jul 1999 Source: Reuters Copyright: 1999 Reuters Limited. Author: Karl Penhaul NEW COLOMBIA PEACE TALKS AS US WARNS ON REBEL DRUGS BOGOTA, Colombia (Reuters) - Colombia's largest Marxist rebel force is set to meet the government for the latest round of peace talks this week amid warnings from the United States that Washington is ready to help fight the guerrillas to stop them trafficking drugs. A recent U.S. report conceded Washington was losing the drug war as cocaine and heroin production spirals in rebel-held territories, allowing the insurgents to earn $600 million a year to fund their long-running uprising. The conflict in Colombia has claimed 35,000 lives in the last 10 years alone. Political analysts have for some time accused Washington of covertly intervening in Colombia's three-decade-old civil conflict by blurring the line between counternarcotics and anti-guerrilla operations. But the June report by the U.S. government General Accounting Office (GAO) and comments by a top military official offered some of the clearest indications yet that the United States is already taking a hand in counterinsurgency and is preparing to step up that involvement. The rebels admit ``taxing'' the drug trade but deny trafficking. They say recent U.S. allegations are aimed at scuppering the peace process and gearing up for intervention. ``Just as we are engaged in talks with the government...the threats from the Pentagon, CIA, DEA and the hawks of war in the United States are all the more evident and damaging,'' said Marco Leon Calarca, a spokesman for the Revolutionary Armed Forces of Colombia (FARC), the oldest and largest guerrilla army in the Americas. FARC commanders are due to meet a team of government negotiators and social leaders Wednesday for the start of full-blown negotiations -- the latest round of a peace process than began in January. The FARC has rejected calls for a cease-fire and political violence has even surged over the last three months. The rebels say talks must go on in the midst of war. Wednesday's talks are set to take place in the town of La Uribe, a former stronghold of the FARC leadership inside a Switzerland-sized zone of the southeast that has been cleared of government troops. While Washington has welcomed peace talks it is adamant that action must be taken to smash what it sees as an alliance between guerrilla forces and drug lords. The GAO said Colombian cocaine output could rise by as much as 50 percent in the next two years and that Colombia was now the main supplier of high-grade heroin to the East Coast. ``Recent offensives by the insurgents...suggest Colombian security forces will be unable to conduct effective anti-drug operations in regions where guerrilla forces dominate,'' it stated. In an effort to combat rising production, the GAO said U.S. officials were now ``routinely sharing'' intelligence on rebel movements. This year the United States funneled a record $280 million into Colombia to wage a war on drugs -- making this Andean nation the third largest recipient of U.S. aid worldwide. The Department of Defense is also taking a lead role in helping the Colombian army set up a 950-man anti-drug battalion. And the United States has put out even stronger signals. Gen. Charles Wilhelm, commander of the Miami-based Southern Command, has said the rebels are endangering regional stability and warned the Pentagon could intervene unilaterally, particularly in Panama, if the rebels persisted in making cross border raids. Since President Andres Pastrana formally launched the peace process, FARC warlords have repeatedly stated they have nothing to negotiate but insist on sweeping agrarian reform, radical wealth distribution and socialist economic policies. Earlier this month FARC fighters killed 35 soldiers in clashes in northern Colombia. The smaller National Liberation Army (ELN), meanwhile, is still holding more than 54 civilian hostages, from a plane hijack in April and a raid on a church during a mass in May. - --- MAP posted-by: Don Beck