QUILLABAMBA, Peru | A national strike by thousands of rain-forest Indians is spawning accusations of a proxy war involving Venezuela and an emboldened peasant movement seeking to undermine Peru's pro-U.S. president.
For more than two months, thousands of natives have been protesting land reforms issued by President Alan Garcia. The laws -- required by a U.S.-Peru Free Trade Agreement -- open vast tracts of rain forest to private energy and agriculture investment.
In April, natives angered by the new laws donned war paint and grabbed spears, overran roads and rivers, seized control of jungle oil facilities and blocked rural airports.
Mr. Garcia initially said that the protesters would not force his hand. But he backtracked after a June 5 confrontation in the oil-rich Amazon region of Bagua left more than 30 police and protesters dead.
Congress voted down two of the laws on June 18, handing Mr. Garcia a defeat and the natives a new sense of power.
Mr. Garcia, who appoints the prime minister, also has agreed to name a replacement for Prime Minister Yehude Simon. On Friday, Mr. Simon said he planned to step down this week in response to criticism of the government's handling of the protests, Reuters news agency reported. Mr. Simon had indicated in mid-June that he would resign, but had not set a date.
Human rights groups say dozens of protesters were killed or are missing and are not accounted for in the official toll.
Opposition parties have blamed Mr. Simon for the violence. He was appointed in October after a corruption scandal led to a major government reshuffle.
His resignation would force the entire Cabinet to offer to step down, but Mr. Garcia is not expected to replace heads of key departments, such as the Finance Ministry. Mr. Garcia has not yet indicated who would replace Mr. Simon.
The conflict has threatened to slow Mr. Garcia's push to attract billions of dollars in foreign investment.
Critics say the president's investor-friendly policies have not done enough to lift incomes in a country where 36 percent of a population of 29 million live in poverty.
Still, many here have questioned how rain-forest peasants, who live hand to mouth, found the resources to strike for weeks.
Fingers have been pointing at Venezuelan President Hugo Chavez, who has been promoting socialist policies in this strategic region known for cocaine and energy resources.
Peruvian Congressman Edgar Nunez told The Washington Times last month that the congressional committee he heads has hard evidence that Mr. Chavez funded protesters through a network of grass-roots groups called "casas de ALBA." He declined to describe the evidence, saying only that investigations are ongoing.
Venezuela's government denies supporting the network.
Mr. Garcia, however, has accused his former presidential rival and Chavez acolyte, Ollanta Humala, of working with Venezuela's president to convince Indians to carry out what many in Peru see as acts of domestic terrorism.
Mr. Humala narrowly lost the presidency to Mr. Garcia in 2006. He embraced a Chavez-style populist platform including promises to nationalize oil, gas and mining. He is set to make another presidential run in 2011.
"Its obvious that the natives are being manipulated," said Roberto Ugarte, owner of a hotel not far from Cuzco, a major tourist attraction. "And its obvious that Chavez and Humala are involved. Our economy is working well, and now they want to change it."
Alvaro Vargas-Llosa, a senior fellow at the Washington-based Independent Institute, agreed.
"I give credibility to claims that they are involved," he said.
"Past experience shows that Humala, and more widely, the Chavez government, are heavily involved in efforts to destabilize outlying provinces and further an anti-democratic cause based on vaguely nationalist and very anti-democratic ideas."
Many say that Perus estimated 500,000 natives -- increasingly hemmed in and clamoring for their share of Amazonian oil and gas projects -- have found new organizations and resolve that will help Mr. Humala.
"This is the first time Indians have worked together and made a change," said Vincent Alagon, a Peruvian peasant who was interviewed recently standing near a flaming effigy of Mr. Garcia in the jungle town of Quillabama. "Alan Garcia is a murderer and a thief. We will make Humala president."
Mr. Vargas-Llosa said that natives are being manipulated and lack the organization and national agenda needed to make real political change.
"Natives have long been ignored by a government, so they respond when people come around with offers to help," he said. The protesters are being "bamboozled."
He added, "What these people really want is the opposite of what Chavez and Humala stand for. They want to own things, to exploit the rain forest themselves and to have property rights."
He said the Garcia presidency wont be the same following the protests.
"For the remainder of his term, he will have to take a defensive posture rather than a proactive one," Mr. Vargas-Llosa said.
Emboldened natives are likely to keep up demands for schools, roads, clinics and a seat at the oil-and-gas table.
While Mr. Humalas National Party has denied giving funding to protesters, many Peruvians - especially wealthy elites - think that Humala loyalists help protesters by dipping into local government checkbooks made fat by oil and natural-gas royalties.
For example, in the town of Quillabamba, native political organizers from an Indian federation called COMARU were openly given rides in government vehicles.
On June 11, a truck bearing a regional government seal carried native protesters to a planning meeting near the Urubamba River town of Ivochote in southeastern Peru.
Prohibited by a pending state of emergency, the meeting was held in a remote building where participants laid plans to take over a pumping facility on a natural-gas pipeline on June 15. The action was canceled at the last minute owing to progress in government negotiations.
The mayor of Convencion, which receives millions of dollars in royalties from the U.S.-backed Camisea Natural Gas Project, is a Humala loyalist named Hernan de la Torre. Mr. la Torre did not show up at a scheduled interview this month and failed to answer questions left on his voicemail about the government vehicles.