QUITO - Ecuador's government has agreed to restore fuel subsidies in a deal with indigenous leaders to end mass protests that have brought the capital, Quito, to a standstill, the UN says.

It came after the two sides held talks brokered by the UN and the Roman Catholic Church.

The talks, which were broadcast live on state television, came after nearly two weeks of violent demonstrations.

President Lenín Moreno had imposed a curfew enforced by the military.

The announcement after Sunday's meeting sparked late night celebrations in Quito. Fireworks were set off and car drivers honked their horns.

A joint statement said the government had withdrawn an order removing the fuel subsidies.

"With this agreement, the mobilisations... across Ecuador are terminated and we commit ourselves to restoring peace in the country," it said.

The two sides will now discuss a new law to ensure subsidies are not exploited by people who smuggle fuel to neighbouring countries.

Government official Juan Sebastian Roldan said talks to start drafting the new law would start immediately.

"Conceding is not losing," he said. "Here we are all conceding."

A commission will also be set up to re-establish peace in the stricken Andean nation, with mediation by the Catholic Church, the UN and others.(FA)