Peru searches for missing police, troops patrol jungle

* Around 60 dead in worst unrest of Garcia's term

* Search on for 2 police missing after hostage drama

* Thousands of Indians with spears block roads

By Marco Aquino

BAGUA GRANDE, Peru, June 7 (Reuters) - Peruvian troops searched for missing police and patrolled towns in the Amazon on Sunday after 60 people died in clashes with Indian tribes opposed to President Alan Garcia's plans to mine and drill oil in the jungle.

Troops controlled the town of Bagua Grande, around 870 miles (1,400 km) north of the capital Lima, after an overnight curfew was imposed to defuse the worst crisis of Garcia's term.

An indigenous leader said 40 protestors were killed and the government said 23 members of the security forces perished in two days of battles over Garcia's push to lure billions of dollars in foreign investment to the rainforest. Protestors say they are defending their ancestral home.

"The situation is normal at the moment, but we are continuing with patrols as a precaution," said Major Jose Luis Santillan, police chief in nearby Bagua Chica, close to the stretch of highway known as "Devil's Curve," where 11 police died when they moved to break up a roadblock on Friday. Dozens of police were held hostage by protestors, but most were freed a few hours later. On Sunday, two were still missing.

"We are looking for the missing police and the weapons the indigenous Indians stole from them," Santillan said.