Colombia's second-biggest guerrilla group says it is willing to hold unconditional peace talks to end five decades of war, but refuses to end its kidnapping, bomb attacks and extortion of foreign oil and mining companies before negotiations start.

Nicolas Rodriguez, leader of the National Liberation Army, known as the ELN, told Reuters in a rare interview that he is open to negotiate an end to the bloodshed with President Juan Manuel Santos' conservative government.

"We are open; it's exactly our proposal, to seek room for open dialogue without conditions and start to discuss the nation's biggest problems," Rodriguez said in a video filmed at a hidden jungle camp in response to questions from Reuters.

Rodriguez' comments come as rumors swirl of behind-the-scenes peace talks with the Revolutionary Armed Forces of Colombia (FARC), the country's biggest rebel group, and pressure builds for Santos to seek an end to the war.

Intelligence sources told Reuters that tentative, high-level discussions have started between the government and Colombia's biggest rebel group. On Monday, regional media network Telesur said a deal to begin talks had been agreed, but the government denied it.

Rodriguez, the ELN commander better known by his nom de guerre Gabino, said his forces would not declare a ceasefire or turn in their weapons ahead of any peace talks, something Santos has insisted on.

"That possibility doesn't exist under any circumstance," Rodriguez said.

Looking worn after almost half a century fighting for the Marxist group in Colombia's inhospitable mountains, the 62-year-old Rodriguez sat framed by Colombia's flag on one side and a second bearing the black, red and white ELN emblem on the other, a rifle propped against a tree behind him.

He said he doubted the government's willingness to talk.

"The government has said no! Santos says he has the keys to peace in his pocket, but I think he has lost them because there seems to be no possibility of a serious dialogue," he said in what is believed to be his first interview in about five years.

The government declined to comment on the interview.

Rodriguez has a $2.5 million bounty on his head and declined a face-to-face interview because he said intense fighting in the area would put his security and journalists at risk. The video, filmed by the rebels, shows Rodriguez answering Reuters' questions read aloud by another fighter.

Santos, who has meted out some of the most crushing military blows against the ELN and FARC, says the "door to peace is not locked with a key," but has denied any talks are under way.

Former President Alvaro Uribe has slammed Santos for seeking "peace at any cost."

The ELN has battled a dozen governments since it was founded in 1964 and is considered a terrorist group by the United States and the European Union. Both the ELN and FARC have stepped up attacks on the infrastructure this year, hitting oil pipelines and power lines repeatedly.

Inspired by the Cuban revolution and established by radical Catholic priests, the ELN was close to disappearing in the 1970s but steadily gained power again. By 2002 it had as many as 5,000 fighters, financed by "war taxes" levied on landowners and oil companies.

The ELN is now believed to have about 3,000 fighters. It has sought peace before, holding talks in Cubaand Venezuela between 2002 and 2007. Experts say there was a lack of will on both sides to agree a final peace plan.

Rodriguez said the government wants to continue the war because it is a "juicy business that pays dividends."

DENIES DRUG LINKS

An ELN fighter since he was 14, Rodriguez flatly denies government claims that his group, like the FARC, funds its war from the proceeds of drug trafficking.

"Under no circumstance," he said, dressed in olive-green fatigues with red and black epaulets on his shoulders and flanked by two heavily armed fighters -- one a woman.

"The ELN is categoric that we are not involved in drug trafficking and our internal laws, our statutes and rules, demand we maintain impeccable conduct from start to finish."

Rodriguez pledged to continue attacking military targets and oil and mining infrastructure until there is a change to policies that he said "excessively" benefited foreign interests.

Colombia, a nation of 46 million, has attracted record foreign direct investment in recent years as troops push the guerrilla groups deeper into the thick jungles.

Efforts to rid Colombia of its reputation as one of the most dangerous places to do business have resulted in a rush of investment into areas that were once off-limits. In those areas, armed rebels roamed almost unhindered over great swathes of land and prevented citizens from traveling in many areas for fear being kidnapped.

Even as the $330 billion economy slows, overseas investor optimism may bring in as much as $17 billion this year, mostly into oil and mining. In 2000, investment was about $2.4 billion.

"If there's dialogue, there'll be accords and new ways of exploiting the riches of the country, but if there's no dialogue and on the contrary they insist on taking the side of capitalist demands, inevitably the fighting will continue," said Rodriguez.

Recent attempts by Colombian lawmakers to boost the level of royalties -- taxes paid by oil and mining companies for exploration rights -- have failed due to a lack of government support. Santos has stuck to his stated principal that a contract should be honored and never altered.

Rodriguez, who bore thinning, closely cropped hair and a mustache, warned that kidnapping and extortion would continue until peace was reached and there was a change in the way that foreign companies operated in Colombia.

"We have always said a large part of the insurgency should be funded by the riches of the oligarchy, which has always exploited the Colombian people. And of course, multinationals that pillage our country should finance the revolution."

He said the Colombian people also fund them, but that the bulk of the ELN's money came from the "riches of the enemy."

"That's our reality and we aren't going to change it or deny it."

TALKS 'SHOULD INCLUDE FARC'

The FARC pledged in February to cease kidnapping for ransom, a move widely seen as evidence that drugs and extortion provided sufficient revenue to maintain its 8,000 or so fighters.

The two rebel groups now maintain good relations, Rodriguez said, despite being bitter enemies in the past and often clashing over territory.

Any peace process should include the FARC, he added, though that would not be a condition for dialogue with the government.

"We believe it would be positive to have one negotiating table," he said, adding that his group was keeping an open mind: "We don't have a fixed stance; we have to be practical."

Congress passed a constitutional reform in June that set the legal basis for eventual peace with Colombia's rebels. The reform prohibits guerrilla leaders accused of crimes against humanity, such as Rodriguez, from holding political office.

Rodriguez, who has dozens of warrants against him for murder, kidnapping, rebellion and terrorism, said that law was an obstacle to peace.

"A basis for peace should be the fruit of agreements between the different parties that facilitate the next steps, but here we are working backwards."