KUALA LUMPUR, March 3 (AFP) - 12:24 - A US journalists' group has called on Malaysian Prime Minister Mahathir Mohamad to end a "campaign of intimidation and harassment" against the country's only major opposition newspaper.

The Committee to Protect Journalists, in a letter to Mahathir, urged him to restore Harakah's licence to publish twice weekly and drop sedition charges against its editor and publisher.

The New York-based group, in the letter released late Thursday, said the move to limit Harakah's circulation, "appears to be the latest example of your administration's efforts to curb the opposition press in Malaysia."The Home (interior) Ministry, which licenses all newspapers, Wednesday renewed Harakah's publication licence only for two issues a month instead of two a week at present.

Local rights group Aliran said the move smacked of "political vindictiveness" and called it a "terrible blow to the freedom of the press."

It said in a statement the government had finally conceded defeat - "that it is no match to counter opposition criticism."

Mahathir Thursday described the clampdown as "gentle" but opponents have called it a blow to democracy and press freedom.

Harakah is the organ of the Parti Islam SeMalaysia (PAS), which made major gains among ethnic Malay voters in last November's elections at the expense of Mahathir's United Malays National Organisation (UMNO).

The move was the latest in a series against Harakah since the polls.The home ministry in January curbed its street sales and confiscated copies, saying it was breaching its licence by selling to non-party members.

The editor Zulkifli Sulong and the paper's printer are facing a sedition charge over an article about the trial of jailed ex-deputy premier Anwar Ibrahim. Sedition is pubishable by up to three years' jail.

They were among five opposition figures charged in January, in an operation which sparked widespread overseas criticism.

Deputy Home Minister Chor Chee Heung Thursday warned Harakah its new permit could be suspended or revoked if its Internet version is published more than twice a month.

Harakah must abide by the terms of the permit if the Internet edition uses the same name as the printed version, he was quoted by the official Bernama news agency as saying.

Mahathir, who is promoting a "Multimedia Super Corridor" south of Kuala Lumpur, has previously promised not to censor the Internet.

It was not clear if Chor's remarks reflected official policy. Bernama later asked subscribers not to use the report, "at the request of the Prime Minister's Department."

Harakah's current sales are around 277,000 for each issue, according to its management. Its annual licence expired Monday.

The mainstream press is solidly pro-government, although some opposition news is carried, and in some cases is owned by businesses linked to UMNO.Harakah says its circulation touched 377,000 just before the election, comparable to or higher than mainstream newspapers.