Fri Oct 5, 7:19 AM ET

YANGON, Myanmar - The top U.S. diplomat in Myanmar sat down for a rare meeting with a representative of the military government Friday, a day after the junta announced a conditional offer to meet with detained democracy activist Aung San Suu Kyi.

Acting Ambassador Shari Villarosa met with Deputy Foreign Minister Maung Myint in the remote jungle capital of Naypitaw, according to a senior embassy official speaking on condition of anonymity because he was not authorized to talk to the press.

Villarosa has been a vocal critic of the junta's brutal crackdown on pro-democracy protesters last week. She received word Thursday that she had been asked to meet with the military-led government, the State Department said in Washington. During her visit, she was expected to repeat the U.S. view that the regime must meet with democratic opposition groups and "stop the iron crackdown" on peaceful demonstrators, State Department spokesman Sean McCormack told reporters in Washington.

Hoping to deflect outrage over soldiers gunning down protesters, Myanmar's junta chief Senior Gen. Than Shwe announced that he was willing to talk with Suu Kyi, the democratic opposition leader — but only if she stops calling for international sanctions.

Than Shwe also insisted that Suu Kyi stop urging her countrymen to confront the military regime, state television and radio said in reporting on the conditions set by the junta leader during a meeting this week with a special U.N. envoy.

The surprise move appeared aimed at staving off economic sanctions, thereby keeping Myanmar's bountiful natural resources on world markets, while also pleasing giant neighbor China, which worries the unrest could cause problems for the 2008 Beijing Olympics.

Diplomats and opposition figures were skeptical that the offer was genuine but, nonetheless, expressed hope that the meeting with Suu Kyi — something she has requested for years — would materialize.

Many governments have urged stern U.N. Security Council action against Myanmar, but members China and Russia have ruled out any council action, saying the crisis does not threaten international peace and security.

"This issue does not belong to the Security Council," China's U.N. Ambassador Wang Guangya said Thursday. "These problems still, we believe, are basically internal."

State media in Myanmar gave new figures Thursday for the number of people arrested during last week's bloody assault by troops. The reports said nearly 2,100 people had been detained, with almost 700 already released.

The government has said 10 people were killed when security forces broke up the mass demonstrations, but dissident groups put the death toll at up to 200 and say 6,000 people were detained, including thousands of Buddhist monks who were leading the protests.

Life in Yangon was slowly returning to normal but security remained tight in downtown areas where protests were quashed last week. A half dozen military trucks were stationed near the Sule Pagoda, a flash point of the unrest.

The typically busy area around the city's famed Shwedagon Pagoda was eerily quiet, with residents avoiding the area outside the temple where Buddhist monks were beaten by soldiers.

Philippine Ambassador Noel Cabrera described the mood in the country as "quite dark, uncertain and depressed," noting that Myanmar remained cut off from the Internet and strategically placed troops were on standby.

Reaction to Than Shwe's offer of talks was mixed.

Thein Lwin, a spokesman for Suu Kyi's National League for Democracy party, scoffed at the general's conditions.

Suu Kyi "does not have confrontational attitude, nor does she encourage sanctions," he said. Asked if he was hopeful that she would accept the junta's terms for talks, he replied: "We'll have to wait and see."

Democracy activists living in exile in Thailand were also not very impressed by the offer.

"This is just PR ahead of the Security Council meeting," said Maung Maung, a member of a self-styled Myanmar government in exile in Bangkok.

"If they really want to talk, she needs to be released first so she has freedom of association and freedom of speech to engage in a dialogue," he told reporters.

Suu Kyi, who has spent nearly 12 of the last 18 years under house arrest, was awarded the 1991 Nobel Peace Prize for her democracy campaign. Her party won elections in 1990 but the junta refused to accept the results.

Myanmar has been ruled by the military since 1962. The current junta came to power after routing a 1988 pro-democracy uprising in bloodshed that killed at least 3,000 people.