Indian rebels in Mexico's remote impoverished south set up roadblocks around villages they control and forced drivers to pay a "war tax."

"What we want is socialism, to exterminate capitalism," said a rebel leader at one roadblock who refused to give his name.At least 65 people have been killed in Chiapas state since Saturday when an estimated 1,000 rebels attacked government installations in several towns and villages demanding better treatment for local Indians.

Indian rebels held three towns and battled soldiers in a fourth Monday. The army apparently was avoiding an all-out offensive on the conflict's third day. President Carlos Salinas de Gortari appealed for a truce in the country's first organized uprising in two decades.

The Vatican offered to have Mexico's Catholic Church try to mediate an end to the fighting. Salinas embraced the offer, but the rebels had not responded by midday Tuesday.

The U.S. Embassy in Mexico City sent representatives to help any Americans who may be caught up in the revolt in the popular tourist state. It was not known how many Americans are in the area. But the embassy said apparently no Americans who want to leave have been unable to do so.

Mexico moved more troops into San Cristobal de las Casas, a 16th-century town of 80,000 people that retains much of its colonial charm and is in the middle of several Maya villages.

The rebels took over San Cristobal de las Casas Saturday and left it Sunday. On Monday, with a curfew in effect, the arched walkways around the plaza, normally bursting with activity, were nearly vacant.

"This is a bohemian community - lots of old hippies and intellectuals who like to go out at night, listen to music and drink coffee," said Mario Antonia Guerrerro, the owner of a restaurant closed for now. "Now everybody just wants to stay inside."

Rebels set up roadblocks and were demanding payment of a "war tax" from motorists, a tactic common to rebels in El Salvador and Nicaragua in the 1980s. The rebels have denied any ties to armed groups elsewhere in the area.

The independent Excelsior news agency put the number of troops in the entire Chiapas state at about 12,000, roughly one-fifth of the Mexican army. The government news agency Notimex said soldiers were stopping cars and trucks traveling to some places in the state, allowing only foot traffic.

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Rebels still hold Altamirano, Huixtan and Chanal.

Fighting remained heaviest in Ocosingo, where residents reached by telephone said rebels were firing at an estimated dozen army helicopters circling the area.

The army retook part of the town, but pockets of rebels remained in and near the village Monday night.

Former Chiapas Gov. Absalon Castellanos, kidnapped Sunday with two relatives by rebels, remained unaccounted for.

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