(Adds details, background) By Hugh Bronstein BOGOTA, Dec 7 (Reuters) - Colombian leader Alvaro Uribe said on Friday he would select a location for talks with rebels aimed at freeing hostages including French-Colombian politician Ingrid Betancourt, kidnapped almost six years ago. The proposal fell short of rebel demands that he pull troops from an area around two western towns to be used as a safe haven to negotiate a swap of kidnap victims for guerrillas held in government jails."This whole country has been a safe haven for the rebels over the last 50 years," said Uribe, condemning the Revolutionary Armed Forces of Colombia, or FARC, for harshly mistreating their 750 captives. He said the meeting must take place in a sparsely populated rural area where there are no police or army installations. The FARC rejected a similar government proposal in 2005. Withdrawing security forces from populated area would allow the rebels to beef up their drug-smuggling and extortion activities, putting thousands more Colombians at risk, the president said. The captives include three American anti-drug contractors and dozens of other high-profile kidnap victims who the government wants released as part of the exchange. Colombia's government last week released videos of some hostages, sparking an outcry over their plight. One showed Betancourt looking gaunt and depressed in the secret jungle camp where she is being held. She was captured during her 2002 presidential campaign. U.S. defense contractors Thomas Howes, Keith Stansell and Marc Gonsalves, were taken during anti-drug mission in 2003. Colombia's Roman Catholic Church proposed the establishment of a meeting place. Uribe said he accepted the proposal and would work with the church to choose a location. The zone designated for the talks must not exceed 150 square kilometers (58 square miles) and the rebels will not be allowed to bring arms into the area, Uribe said. The talks would last 30 days at most, Defense Minister Juan Manuel Santos said after Uribe spoke. Uribe also announced the establishment of a $100 million fund to pay FARC members who rescue kidnap victims and turn them over to the government. French President Nicolas Sarkozy is leading an international pressure campaign to convince the rebels to negotiate. Venezuela's leftist President Hugo Chavez tried to broker a deal earlier this year but Uribe removed him as a mediator last month, causing a diplomatic row. The FARC says it is fighting for socialism, but it finances its war with cocaine trafficking and even left-wing Colombian politicians says the group has scant popular support. (Reporting by Hugh Bronstein; editing by Alan Elsner)
