Negotiations had been bogged down since Wednesday over a demand by the militants they not be prosecuted for dynamiting pipelines and vandalizing pumping equipment last week.

The final settlement document did not address the issue of immunity other than to say the protesters, the government and the private oil firms would maintain a "good neighbor" relationship.

Ecuador, a former OPEC member, is South America's biggest oil supplier to the United States after Venezuela.

Oil companies including Occidental Petroleum Corp., Petrobras and EnCana Corp. will pave 160 miles (260 km) of new roads in the Amazon provinces of Sucumbios and Orellana under the deal, Gonzalez said.

About two-thirds of the 25 percent income tax paid by the companies would be steered toward local health, environment and development projects.

Demanding that oil firms invest more in the communities where they drill, the militants crippled Ecuador's petroleum industry and helped lift world crude prices.

"This settlement solidifies the idea that local community leaders can pressure the central government, through illegal and violent action, into giving those communities what they want," said Adrian Bonilla, director of Ecuador's branch of the Latin American Faculty of Social Sciences.

"This is not a healthy sign," he added. "The government will now probably have to confront a lot of similar protests in other parts of the country."

Many of the protest leaders are local elected officials from Sucumbios and Orellana.

Output from state oil firm Petroecuador climbed back to 158,080 barrels on Thursday, recovering from the weakness of recent days but still under the 201,000-bpd average before the attacks.

Communities surrounding oil wells in eastern Ecuador say they benefit too little from the operations, which they say cause environmental damage.

"This marks an important point in which, for the first time, we got the attention of the oil companies and persuaded them to do something," Edmundo Espindola, mayor of the Sucumbios oil town of Shushufindi, told Reuters.

Espindola was among about 60 protest leaders in Quito for negotiations aimed at ending the crisis, which presented the biggest challenge yet for President Alfredo Palacio, appointed in April after Congress fired President Lucio Gutierrez for meddling with the Supreme Court.