Some 3,000 residents of Banos returned to the tourist town on Thursday under an agreement with the governor of Tungurahua province, Ignacio Vargas.

The agreement allowed the evacuated residents to return home at their own risk, and ordered the withdrawal of troops guarding the area.

One woman died and several other inhabitants and soldiers were injured on Wednesday, when troops opened fire on about 80 residents armed with shovels and rocks who overran a roadblock.

About 25,000 people were evacuated from area in October after the Tungurahua volcano rumbled back to life, spewing ash and spitting hot rocks high into the air.

Mayor Camilo Espinoza said rumours that soldiers had been looting their homes strengthened residents' resolve to return.

Until now, the authorities had refused to allow them to go back, saying the risk of an eruption remained too high.

History of violence

The incident was the latest in a string of confrontations between inhabitants and the soldiers guarding the restricted zone, which lies 125km (75 miles) south-east of the capital, Quito.

Last weekend, several people suffered minor injuries during a clash between hundreds of evacuated residents and soldiers.

Another 2,000 townspeople trekked back into Banos through mountain passes and barricaded themselves in.

In November, about 300 residents tried to force their way past the roadblocks, but turned back after police threw tear gas grenades.

The 5,016m (16,266ft) volcano had been dormant since 1916, but became active again in September.