YANGON (AFP) - Hardliners in Myanmar's military regime are consolidating their control of the country after ousting the premier, painting a gloomy prospect for the release of detained opposition leader Aung San Suu Kyi.
Prime minister General Khin Nyunt was arrested and put under house arrest for alleged corruption, Thai officials said Tuesday, after a power struggle within the top ranks of the junta.
Myanmar state media said Tuesday that Khin Nyunt had retired for "health reasons" and had been replaced by Lieutenant General Soe Win who has publicly stated his opposition to talks with Aung San Suu Kyi's party.
Soe Win was seen as an organiser behind a violent clash between her supporters and a pro-junta mob in May last year that heralded the Nobel peace laureate's latest period of house arrest.
As the US expressed concerns that marginal hopes for reforms had dwindled, representatives of ethnic groups vital to the stuttering democratic process were gathering in Yangon after being summoned by the military, according to sources in Myanmar.
The deposed premier was seen as responsible for persuading nearly 20 ethnic groups opposed to the regime to sign up to ceasefire agreements.
Their cooperation is seen as vital to any success for the junta's seven-point democracy roadmap with its eventual goal of national elections -- although western observers have dismissed the plan as a sham.
UN Secretary General Kofi Annan said in a statement Tuesday that he "calls on the Myanmar authorities to remain committed to the process of national reconciliation and democratisation."
Meanwhile, the capital Yangon remained calm on Wednesday with the military keeping a low-profile after the upheavals among the country's leadership.
Because of looting fears, jewellery shops and cinemas were closed during the changeover, which was only confirmed on Myanmar state media late Tuesday.
Barbed wire was laid out in front of the roads to the homes of senior military leaders in the capital but security overall remained low-key, according to witnesses.
The isolated regime closed its border checkpoints as the drama played out and telephone communication with Yangon became difficult amid the swirling rumours of high-level changes.
"We are a little bit concerned that in the future it will be more difficult for our businesses until things become clearer," a businessman in Yangon told AFP. "We will just have to wait and see."
Pro-democracy supporters said they were gloomy at the political changes and the rise of Soe Win, an ally of the hardline head of the junta Than Shwe.
Major-General Myint Swe, who led the operation to put the former premier under arrest, takes General Khin Nyunt's position as head of military intelligence that he held for 20 years.
Debbie Stothard, of pressure group Altsean-Burma said the departure of Khin Nyunt signalled a failure by the faction in the junta that backed some talks with Aung San Suu Kyi.
"The implications are quite dire," Stothard said. "I'm certain that members of the international community would be regretting they had not pushed harder for reforms when they had the chance."
But Aung San Suu Kyi's National League for Democracy (NLD) party reacted cautiously to the new appointment.
"We must wait and see. It does not depend so much on Soe Win but on the number one (Than Shwe)," party spokesman U Lwin told AFP.
The US said the leadership changes were a blow to marginal hopes the leadership might restore political and human rights or open a dialogue with Aung San Suu Kyi.
"The events that we're watching don't point in the direction of allowing freedom of exercise of political and human rights and therefore, we're just following them," State Department spokesman Richard Boucher said.
The military has controlled Myanmar since a coup in 1962. The NLD won national elections by a landslide in 1990 but was not allowed to rule.