By Arthur Asiimwe
KIGALI, Nov 29 (Reuters) - Burundi's president said on Tuesday that he still wanted peace talks with the only remaining rebel group but ruled out their demand that its imprisoned fighters be freed as a precondition for negotiations.

The roughly 3,000-strong Forces for National Liberation said last week for the first time that it was ready to talk peace with the new government of the tiny central African nation, but said its imprisoned members must first be set free.

"These are prisoners of war," President Pierre Nkrunziza told reporters on a visit to the capital of neighbouring Rwanda. "Let the FNL come to the negotiating table and make this part of the agenda. They should stop playing tricks and be serious.

"We will not release their members unless they allow talks."

Most Burundians believe their country is on the path to peace after a series of polls culminated in Nkurunziza's election and inauguration in August, under a U.N.-backed plan to end ethnic civil war that has killed 300,000 people since 1993.

Although Nkurunziza is himself a Hutu and a former rebel, the FNL continues launching attacks from its hideouts in the hills surrounding the capital Bujumbura.

Nkurunziza was in Kigali on his first official visit to Rwanda, where he met Rwandan President Paul Kagame.

Without saying what action they might take, both presidents said they would work together to deal with the threat posed by both Burundian and Rwandan Hutu rebels operating in the jungles of eastern Democratic Republic of Congo, near their borders.

Both presidents said the issue of ethnic differences between the two major groups, Hutu and Tutsi, in their countries was on the verge of ending because of "new and focused" leadership.

"The tensions between these two ethnic groups in both countries were largely propelled by bad leadership," Kagame said. "The period of divisive politics in now over."

Hostility between the Hutus and Tutsis led to the slaughter of over 800,000 people during Rwanda's 1994 genocide, and has propelled cycles of similar violence in Burundi's post-independence history.

Analysts say the good relations between Rwanda's Tutsi leader and Burundi's Hutu president send out a message of reconciliation and could help the volatile Great Lakes region become more stable.