LIMA, August 23, 2008 (AFP) - Thousands of indigenous Peruvians scored a victory over President Alan Garcia's government Friday when Congress repealed two laws that opened up their Amazon tribal lands to development.

Some 12,000 Peruvians from 65 tribes occupied oil and electricity plants in the Amazon basis from August 9 before agreeing to a 48-hours truce late Wednesday after the president of Congress promised to revise the controversial laws.

Hundreds who gathered in the plaza of the northeastern Amazon city of Bagua to watch the session on television rejoiced after the unicameral Congress threw out the laws by a vote of 66 to 29 after a three hour debate.

'This signals a new dawn for Amazon peoples,' said Alberto Pizango, leader of the Inter-Ethnic Association of the Peruvian Forest (Aidesup).

Economists estimate 3.5 billion dollars' worth of timber, mineral and oil products are locked in a 92,000-square kilometer (35,500 square miles) region of the Amazon basin, the size of Taiwan.

An angry President Alan Garcia on Wednesday said it would be 'a very serious, historic mistake' to revoke the development laws.

'If that were to happen out of fear of protesters, fear of unrest, Peru would someday remember it as the moment when change came to a halt and hundreds of thousands of people were condemned to poverty, exclusion and marginalization,' he told reporters.

The Garcia administration contends the development laws are aimed at improving the livelihood of indigenous communities by developing their farming, livestock and mining activities so they can better integrate with the country's economy.

Indigenous leaders complain that they were never consulted and that the laws are really intended to benefit the free trade agreement Peru has signed with the United States, to the detriment of native communities.

During their 12-day strike, protesters occupied the hydroelectric plant in Bagua and disrupted gas production in the southern Cusco region.

On Sunday, clashes between 800 demonstrators and police in Bagua left at least four people injured, prompting the government to decree a 30-day state of emergency in the Amazon area.

Just before the agreement was struck Wednesday, 11 people were injured in Bagua when scores of natives armed with spears and stones attacked a local police station defended by some 500 police.