Uzbek government troops moved in overnight to retake an eastern border town from a rebel group who had vowed to fight for an Islamic state in the former Soviet republic, residents said today.

Jeremy Page, a Times correspondent, reported that that troops and police moved into the town of Korasuv in the early hours and appeared to have taken it with minimal force after community elders promised that corrupt local officials would be replaced and the border with Kyrgystan reopened after a two-year closure.

"They appear to have done a deal to avoid bloodshed," Page said from the Kyrgyz side of a border crossing near Korasuv that reopened this morning. "Speaking to Uzbeks coming across the border, it became clear that the police and military moved in overnight and retook the city without any fighting."

Analysts had feared that seizure of Korasuv by an Islamic group headed by Bakhtiyor Rakhimov, a farmer-turned-rebel leader, could herald a new, more dangerous stage in the unrest that has gripped Uzbekistan's eastern Fergana valley.

Korasuv is near the town of Andijan, where vodka-fuelled troops are alleged to have massacred around 500 people when they broke up an anti-Government demonstration last Friday.

Mr Rakhimov claimed to have some 5,000 supporters in the town of 20,000 and his supporters said that they would set up strict Islamic rule. But the rebel leader and several of his henchmen were arrested this morning as the troops moved in.

Mr Rakhimov's wife, Gulchakara, told the Associated Press that the family's house was raided before dawn by 30 Special Forces troops, who hauled him and his 14-year-old son away. "They beat him with rifle butts on the head and kicked him," she said.

Korasuv residents had raised two main grievances: firstly, they had complained of stifling corruption among local police and officials; secondly, they were angered by the decision of President Islam Karimov to close the border with Kyrgyzstan to crack down on cross-border trade.

Many people in the town used to buy clothes or electronic and household goods in a Chinese wholesale market on the Kyrgyz side of the border that they then sold on in the rest of the country.

Page, who was not allowed to enter Uzbekistan this morning, reported that the border guards policing the crossing to Kyrgystan appeared to have been replaced - meeting another local demand.

Mr Karimov's Government has denied that its troops opened fire on innocent civilians during anti-government protests in the city of Andijan last Friday, although it says 169 people were killed in clashes between authorities and militants.

But an opposition party and a human rights activist say that at least 500 - mostly civilians - were killed in Andijan and about 200 in another eastern city, Pakhtabad. The protests triggered similar action in other cities, including rioting on Saturday in Korasuv, during which most government officials fled.

In Andijan, witnesses described troops shooting indiscriminately into protesters last Friday. Diplomats and international agencies have asked for better access to the city to try to determine what happened, amid growing scepticism about the Government’s claim that it was responding to militant violence.

Jack Straw, the Foreign Secretary, yesterday added his weight to UN and EU calls for a full and independent inquiry into the alleged massacre. After meeting Condoleezza Rice, the US Secretary of State, in Washington, Mr Straw said: "It is of crucial importance for the stability of society in Uzbekistan... that we get to the bottom of what happened."

US officials, aware that Mr Karimov's Government is a key regional ally in the War on Terror that has allowed the US to set up a major military base, also started to step up their criticism of the Andijan killings.

"Reports being compiled paint a very disturbing picture of the events and the government of Uzbekistan’s reaction to them," State Department spokesman Richard Boucher said. "It’s becoming apparent that very large numbers of civilians were killed by the indiscriminate use of force by Uzbek forces."

Uzbek officials took foreign diplomats and journalists on a lightning-quick tour of Andijan yesterday, showing them a prison and the local administration building and arranging meetings with local officials.

The delegation was kept blocks away from the people of Andijan, leaving little chance for an objective assessment of last week's violence. Some diplomats complained the trip was too short and limited to draw conclusions about the violence.

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