By Niko Mchedlishvili

TBILISI, Feb 8 (Reuters) - Georgia is prepared to lift an economic blockade on its breakaway territory of Abkhazia, the minister leading negotiations with the ex-Soviet state's separatist regions said on Friday.

Temur Iakobashvili, State Minister for Reintegration, did not say what conditions might be attached to lifting the embargo. Abkhazia has rejected past Georgian offers because they were linked to it diluting its claim to independence.

But Iakobashvili, brought into the government in a reshuffle last month, struck a tone that was more conciliatory than the rhetoric from Georgian President Mikhail Saakashvili, who has vowed to bring the separatists to heel.

Conflicts with the separatists have destabilised Georgia, a U.S. ally and transit route for energy exports from the Caspian Sea. They have also poisoned relations with neighbouring Russia, accused by Tbilisi of backing the separatists.

"I am ready to discuss the question of lifting economic sanctions," the minister told Reuters in an interview.

"We can look at everything, there are no taboo subjects: not sanctions, not the railway," he said.

A rail link between Tbilisi and the Abkhaz capital Sukhumi, on the Black Sea, has been severed since the separatists threw off Georgian rule in a 1990s war. Georgia's navy also frequently prevents ships docking in Abkhazia's ports.

"We can discuss all of this, we must do everything to restore relations between us, economic and trade relations," Iakobashvili said.

ENERGY TRANSIT

Georgia is on the route of an oil pipeline operated by a BP-led <BP.L> consortium that will soon be pumping 1 million barrels of crude a day from the Caspian Sea to a terminal on Turkey's Mediterranean coast.

Abkhazia, and Georgia's second breakway region of South Ossetia, are likely to renew their calls for international recognition if, as is widely expected, Western states recognise the independence of Serbia's Kosovo province this year.

Saakashvili last year vowed to take control over Abkhazia within a year and promised to force out Russian peacekeepers in both regions. Tbilisi alleges that the Russian troops side with the separatists.

Russia has accused Tbilisi of building up its military to take back the regions by force.

Iakobashvili said Georgia had no interest in forcing the separatists to accept Tbilisi's rule, or in excluding Russia from the search for a peace settlement.

"We will definitely have negotiations with Russia," he said. "If someone believes that we will drive the Russian peacekeepers out of there and return Abkhazia, they are deeply mistaken."

"Approaches change, and first of all that means that our policy will be aimed at improving people's lives."

"In this case, integration means not just integrating territories, but the integration of people. We must not just bring back Abkhazia and South Ossetia, but bring back the people of Abkhazia and South Ossetia," he said. (Writing by Christian Lowe; Editing by Ralph Boulton)

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