MEXICO CITY Mexico's Zapatista rebels on Monday roundly rejected an Indian rights law passed by Congress, dealing a body blow to prospects for peace talks in troubled Chiapas State, Reuters reported.

President Vicente Fox had urged Congress to pass the bill guaranteeing rights for the country's 10 million indigenous people, and rebel leaders had made it a prerequisite for renewing dialogue with the government that broke off in 1996.

But in their first statement since the rights bill was passed late Saturday, the rebels accused the government and Congress of watering down the legislation to the point where it was an insult to their movement.

"With this reform, federal lawmakers and the Fox government close the door to dialogue and peace," the Zapatista rebels said in a communique from their Chiapas jungle hideout. "They justify the existence of ... armed groups in Mexico."

The legislation calls for a series of constitutional amendments to guarantee rights of self-determination for indigenous communities. The changes must be approved by 17 of the 32 state legislatures to be incorporated.

Political leaders including Fox hailed passage of the measure as the final step toward a peace deal with the Zapatistas, who took up arms in 1994 to defend Indian rights.

But the rebels, like other indigenous leaders, denounced the final measure as a gutted version of the original that had been proposed by Fox and endorsed by the Zapatistas.

The Zapatista leadership said it had ordered rebel liaison Fernando Yanez to immediately halt efforts toward reopening dialogue with the government. The rebels pledged not to put down their arms, rejecting any new talks until the government recognized Indian rights as set forth in the original bill.

That position seemed to leave the Fox government near where it began six months ago, when the new president's inauguration set off a dizzying series of events that raised hopes for a peace deal.

Zapatista Subcommander Marcos led a triumphant march from the Chiapas jungle to the floor of Parliament last month, where 23 masked rebel commanders lobbied Congress to pass the Indian rights bill.

The original legislation was based on the 1996 San Andres Accords between the rebels and a Congressional Peace Commission. It called for Indian autonomy in government, administration of justice and the use of land and natural resources.

The final version is less far-reaching. It gives some autonomy to Indian communities but balances that against respect for national sovereignty, unity and individual rights.