Protesters demanding lower fuel, food and medicine prices have blockaded the crucial Pan-American Highway and other major roads with stalled trucks and burning tires, and some have clashed with police.

"I have absolutely no doubt that through a sincere and respectful dialogue, we can reach viable solutions," President Laurentino Cortizo said as the talks got under way in Penonome, a few hours southwest of Panama City.

On Sunday, the government and some protest leaders announced a deal to end the crippling expression of anger in the country of 4.4 million people.

But roadblocks and marches resumed this week, as other groups rejected the deal, saying they had not been consulted — leading the government to agree to a new round of talks to be mediated by the Catholic Church.

In opening the fresh negotiations, Cortizo welcomed the lifting of most roadblocks across the country and appealed to protesters to end the remaining ones to allow economic activity to resume.

On the protesters' side was the Anadepo alliance of civic groups, labor unions and representatives of Indigenous communities.

"What we are doing at this table is for those who are there in the streets, who have been beaten, for those who are suffering," Luis Sanchez, a leader of Anadepo, said as the talks began.

'Concrete answers'

The protesters are demanding lower prices on basic consumer goods, fuel, energy and medicines, and more spending on public education and health care.

They also want urgent action against corruption amid growing public concern about high official salaries and government waste in a time of growing economic hardship.

"We hope that the government will come with concrete answers to the fundamental needs of the population," Saul Mendez, secretary-general of the Suntracs construction workers union that took part in the revolt, said ahead of the talks.

Despite its dollarized economy and impressive growth figures, Panama has one of the world's highest rates of social inequality, with poor access to health services, education and clean drinking water in some areas.

The demonstrations have triggered severe food and fuel shortages in some parts of the country, and the business sector says $500 million has been lost.

On Wednesday, a convoy of 200 trucks bringing much-needed food to Panama City with an escort of police and Suntracs members was held up at a roadblock.

Suntracs had described the caravan as a "humanitarian" delivery, and unions later denied they were responsible for its holdup, blaming unspecified "thugs."

Police said they would ensure the load arrived safely on Thursday.

The government agreed over the weekend to reduce the price of petrol to $3.25 per gallon after another cut announced last week — to $3.95 from $5.20 per gallon in June — was not enough to appease the demonstrators.