By DAN KEANE

President Evo Morales and Bolivia's opposition governors doused the latest flare-up of the country's deep political divisions, signing a pledge to hold talks over key reforms long sought by both rival factions.

Tuesday's pact requires anti-Morales protesters to cede control of government buildings and gas pipeline installations seized last week during demonstrations across the opposition-controlled eastern lowlands, the state news agency reported.

Morales supporters must also call off their counter-demonstrations in support of Bolivia's first indigenous president.

The rival factions vow to address the political battles that during Morales' administration have repeatedly driven South America's poorest country to flashes of brief but intense street violence.

On the table will be the distribution of natural gas revenues, greater autonomy for eastern provinces and a draft constitution that would grant more power to the long-oppressed indigenous majority.

Morales signed the accord even as negotiations seemed threatened by the arrest of an eastern governor, who was accused of directing an ambush of the president's supporters that killed at least 15.

The United States Tuesday fired the latest salvo in an ongoing diplomatic feud by declaring that Bolivia has "failed demonstrably" to fight cocaine production and placing it on a counternarcotics blacklist along with Venezuela and Myanmar.

The decision came only days after Morales expelled the U.S. ambassador from Bolivia, accusing him of supporting the country's political opposition. The State Department denied politics played any role in Tuesday's announcement.

The designation can result in cuts of U.S. aid, but President Bush signed a waiver allowing Bolivia's anti-drug assistance - some $55 million in 2007 - to continue.

Bolivia's eastern lowlands, home to the country's natural gas deposits and best farmland, have long resisted Morales' attempts at broad socialist reform, demanding a bigger share of gas revenues and blocking his plan to redistribute fallow land to the poor.

Last week anti-Morales mobs ransacked government offices in eastern Bolivian provinces, hoping to stall a vote on a draft constitution that would allow Morales to run for re-election when his present term ends in 2010.

The president dispatched soldiers to the remote Amazonian province of Pando last week after gunmen there killed at least 15 people, mostly Morales supporters, and injured at least 37.

On Monday the troops arrested Pando Gov. Leopoldo Fernandez on charges of "genocide" for allegedly organizing what it described as an ambush of the president's supporters. He denies the allegations.

The United States was offering a government flight to neighboring Peru on Wednesday for any American citizen wishing to leave the country. The Peace Corps evacuated its 113 volunteers to Lima over the weekend, officials said.

While more than 1,000 pro-Morales demonstrators marched near the U.S. Embassy on Monday - police kept marchers blocks from the building itself - there have been no reported attacks or threats on Americans living in the country.