BANGUI, July 14 (Reuters) - The army of Central African Republic has freed 11 Cameroonian hostages after a two-hour gun-battle with bandits in the remote northwest of the country, state radio reported on Saturday.

The hostages were thought to be among 22 people kidnapped late last month in Cameroon's remote east, where insecurity has increased over the last two years due to the civil conflict in neighbouring Central African Republic.

Central African state radio said one bandit was killed and two soldiers injured in the fire-fight, which took place on Wednesday.

Kidnappers often target Cameroon's nomadic, cattle-herding Mbororo people, who have a reputation for wealth and sometimes pay millions of CFA francs (thousands of dollars) to free their relatives.

Central African Republic has suffered decades of coups and instability since independence from France in 1960. President Francois Bozize himself seized power in a 2003 military uprising, before holding elections in 2005.

In the northwest, government troops have razed scores of villages in the hunt for rebels in recent years, leaving the people victim to bandits known locally as Zaraguinas.

A north-eastern revolt mounted last year from Sudan's war-torn Darfur province was eventually repulsed with the help of fighter jets and special forces from former colonial power France.

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