Paraguay has deployed its army to resolve the violent land dispute in Curuguaty, a remote northern forest reserve (AP)

Paraguay has deployed its army to resolve a violent land dispute in a remote northern forest reserve after 17 people were killed in gunbattles between police and landless farmers.

The clash prompted President Fernando Lugo to accept the resignations of his interior minister and his chief of police.

The violence broke out as police tried to evict about 150 farmers from the reserve, which is part of a huge estate owned by a Colorado Party politician opposed to Mr Lugo, who was a Catholic bishop before renouncing the priesthood to run for president.

Among the seven officers killed was the brother of Mr Lugo's chief of military security.

Ten farmers also were killed, and 27 other officers were injured as police kept up the firefights in the forest, some 150 miles north of the capital Asuncion.

After gun battles that lasted about eight hours, the farmers dispersed into the jungle and police took control of the reserve, said Gregorio Almada, security vice minister for the Interior Ministry.

Mr Lugo suspended his agenda and called a Cabinet meeting. He said the army has his support to put an end to the violence and ruled out any connections to the Paraguayan People's Army, a small leftist guerrilla group that has attacked rural police posts in the northern part of the country.

"I extend my sorrow and repudiation of the actions that led to the killing of these people," Mr Lugo told reporters.

Mr Lugo did not explain why he accepted the resignations of Interior Minister Carlos Filizzola or Police Chief Paulino Rojas. The presidency did not say whether he had approved the eviction, or was even aware of it.

PA