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HORLIVKA, Ukraine/KYIV, Oct 18 (Reuters) - Russian-backed separatists on Monday ended their blockade of a hotel housing international conflict monitors in eastern Ukraine, an incident sparked by the capture of an officer by Ukrainian armed forces last week.

The Organization for Security and Co-operation in Europe (OSCE) said on Sunday its monitors were unable to leave their patrol base in a hotel in the separatist-controlled town of Horlivka while the separatists demanded the officer's release.

The OSCE, Europe's main security watchdog, said the base's vehicle entrance had been locked with a chain and padlock and that they had seen tents pitched outside the hotel.

It was one of several incidents reported by the OSCE of its monitors being prevented from carrying out their work since the officer's capture.

On Monday afternoon a Reuters reporter witnessed several protesters who had stood outside the hotel in Horlivka leaving after what they said were talks with the OSCE monitors.

"We agreed today that the protesters unlock the building and give the OSCE members a chance to continue their duties," said one of the negotiators, Natalya Kruzhilina.

Protesters opened the gate of a parking lot where two OSCE cars were parked and dismantled their tents.

However, the OSCE's Special Monitoring Mission to Ukraine (SMM) said in an emailed statement that its monitors were still not able to deploy from their hotel in the city of Donetsk.

The OSCE had suspended the monitoring mission by its team in Donetsk after protesters gathered and pitched tents over the issue of the captured officer. read more

"As a result of a protest in front of the hotel where Mission members live in Donetsk city, and in line with its safety and security procedures, the SMM does not deploy patrols from the Donetsk Team and its Hub in the same city," it said.

"The patrolling from the other SMM locations continues as normal. We call upon the sides to remove all impediments to the SMM's freedom of movement."

The SMM has been deployed in eastern Ukraine since 2014 with the aim of arranging dialogue between Kyiv's forces and the separatists amid a conflict that Ukraine says has so far claimed about 14,000 lives.

"HOSTAGES"

The Ukrainian government had described the OSCE monitors as "hostages" and in a statement called on the international community to investigate what it said was another attempt to undermine the monitoring mission's ability to operate.

"The detention of international observers by armed individuals is a sign of international terrorism," the Ukrainian delegation to the peace talks said.

The foreign minister of the Russia-backed self-proclaimed Donetsk People's Republic, Natalya Nikonorova, said the OSCE mission in Donetsk was safe and its monitors had not asked to leave the building so far.

The people outside the hotel were unarmed, Nikonorova said. "There are no acts of violence... People express their resentment and, by the way, we understand them."

The separatists say the officer, Andrei Kosyak, was captured by the Ukrainian military near the front line last Wednesday while he was helping to oversee the ceasefire.

The Ukrainian defence ministry said Kosyak was a Russian citizen and belonged to a group of Russian servicemen who had carried out an undercover reconnaissance mission.

On Sunday, the SMM also said three of its patrol vehicles were prevented from travelling from government to separatist-controlled areas until Kosyak was freed.

The conflict dates back to 2014, when Russia annexed the Crimean peninsula from Ukraine after mass street protests that ousted Ukrainian President Viktor Yanukovich, a Kremlin ally.

Fighting then erupted in eastern Ukraine between Kyiv's forces and Russian-backed separatists. Moscow rejects Kyiv's accusations that it has deliberately fomented the conflict and that it has forces in eastern Ukraine.

Reporting by Pavel Polityuk and Margaryta Chornokondratenko in Kyiv, Alexander Ermochenko in Horlivka and Maria Tsvetkova in Moscow;Editing by Gareth Jones, Matthias Williams, William Maclean

Our Standards: The Thomson Reuters Trust Principles.

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Separatists end blockade of hotel housing conflict monitors in eastern Ukraine - Reuters