Ignacio Perez, president of Ecuador's Chamber of Agriculture, said the Indians were attempting to form a "state within a state" and would "do away with the legitimate property" of landowners.
On Tuesday and Wednesday, 100 members of the Confederation of Indigenous Nations of Ecuador (CONAIE) occupied the Parliament Building in Quito and demanded constitutional recognition of Ecuador as a "multi-ethnic and multi-cultural" nation, and an amnesty for 1,000 peasants charged with offense under the penal code.
The president of the Legislative Assembly, Edelberto Bonilla, has agreed to include their demands in the agenda of the forthcoming parliamentary sessions.
CONAIE's president, Luis Macas, warned that if the Indians' demands are not met, they would form their own parliament and government.
According to Ignacio Perez, CONAIE's demands threaten to "undermine the unity of the country".
The Interior Minister, Cesar Verduga, appealed for "calm" while the Indians' demands are discussed, but said he did not believe Ecuador should be declared a "multi-ethnic and multi- cultural" nation.
CONAIE believes that such a declaration would open up development opportunities for the indigenous communities.
Meanwhile, the armed forces sent a letter to President Rodrigo Borja calling for curbs on "the activities of extremist movements and international groups, who take advantage of the natives' ingenuousness in their attempts to set up an Indian state".
The cattle-ranchers' association also called for "clear government action" and warned of the international pressures aimed at "setting the country alight, in the context of the 500 years of the discovery of America".
Last week CONAIE withdrew from renewed negotiations with the government when their request for the dismissal of a judge was turned down.
The government believes the problems with the country's Indians "stem from the age-old exploitation which they have suffered".
Ecuador's three million indians account for about 30 percent of the country's population. (ends/ips/trd/np-pr/dc/cs/cg)