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POLITICAL UNCERTAINTY RISES AS PEACE ENVOY STEPS DOWN

SHARE POLITICAL UNCERTAINTY RISES AS PEACE ENVOY STEPS DOWN

The resignation of the government peace envoy to Maya rebels in the southern state of Chiapas increased political uncertainty in Mexico Friday as the country's closest-ever presidential elections loomed.

Chiapas Peace Commissioner Manuel Camacho Solis resigned late Thursday after an apparent power struggle within his own ruling Institutional Revolutionary Party (PRI).He said he had taken the peace process as far as it could go and had been hampered in his efforts by criticism from Ernesto Zedillo, the PRI's presidential candidate.

Camacho added he was withdrawing from politics while President Carlos Salinas de Gortari remains in power. Mexico holds presidential elections Aug. 21 and Salinas steps down in December.

Mexican stock prices dipped following Camacho's announcement, and the national currency fell against the dollar on what traders described as nervousness and uncertainty.

"A lot of people are expecting negative effects from Camacho's resignation," one foreign exchange trader said.

The guerrillas of the self-styled Zapatista National Liberation Army, who rose up in arms Jan. 1 to demand greater democracy, land and legal reform and fairer treatment for Mexico's indigenous people, had no immediate reaction, but there were no reports of renewed unrest in Chia-pas.

A cease-fire has held in the impoverished state near the Guatemalan border since Camacho be-came peace envoy.

Samuel Ruiz, the bishop of San Cristobal de las Casas in Chiapas who has mediated in the conflict, said he would continue to work for peace.

Salinas announced that the governor of Chiapas, Javier Lopez Moreno, would now be responsible for efforts to end the uprising and said the government would go ahead with increased spending in Chiapas, including health and education programs already promised by Camacho.

The government says the programs will be restricted to non-rebel zones pending an end to the uprising.

Political analysts and opposition politicians said Camacho's broadside against Zedillo appeared to be part of a wider power struggle ahead of the August elections.