(Adds defense minister's reaction, paragraphs 12 and 13)

By Luis Jaime Acosta

MEDELLIN, Colombia, May 15 (Reuters) - A scandal tying some of Colombian President Alvaro Uribe's allies to paramilitaries touched two top ministers on Tuesday when an ex-militia commander charged he met with them before his illegal group demobilized, witnesses at his legal testimony said.

The accusations could fan a scandal so far involving the arrests of 13 lawmakers on charges they colluded with the militia bosses, who committed atrocities in a conflict with guerrillas before they reached a peace agreement with Uribe.

Salvatore Mancuso, the now-jailed commander of the AUC paramilitary movement, made his charges during testimony as part of the deal in which militia leaders must give full confessions of crimes in exchange for short prison terms.

Reporters were barred from proceedings at the Medellin attorney general's office.

But judicial sources and witnesses representing victims said Mancuso testified he met with Vice President Francisco Santos and Defense Minister Juan Manuel Santos from 1996 to 1997 before they were in government and before Uribe became president.

The Santoses are cousins and belong to one of Colombia's most influential families. At the time of the meetings alleged by Mancuso, the vice president was a columnist at the Santos family-owned El Tiempo newspaper and the defense minister was a private citizen.

Mancuso testified Francisco Santos met with paramilitary commanders to talk about the idea of a militia group to fight guerrillas in the Bogota area, Carlos Ivan Lopera, a lawyer for victims who was allowed to attend the testimony, told Reuters.

"Mancuso said Pacho (Francisco) Santos was presented with a countersubversive project on three occasions and that he appeared to favor it," Lopera said.

Lopera said Mancuso testified that Juan Manuel Santos also met with paramilitaries to talk over an alliance to defeat then-President Ernesto Samper. Samper governed Colombia from 1994 to 1998 but faced a crisis over charges his campaign received funds from drug traffickers.

Uribe, who receives hundreds of millions of dollars in U.S. aid each year to help quell Colombia's insurgency, said nothing about the charges during a late-night televised speech.

A spokeswoman for the vice president's office said it would not comment.

But the defense minister said late on Tuesday he met the paramilitaries and guerrillas in 1997 in an effort to broker peace. He said those facts were well documented.

"If this is the 'truth' that Mancuso wants to reveal, then people are going to be disappointed," Juan Manuel Santos said in a statement.

CRITICISM AT HOME, OVERSEAS

The scandal involving paramilitaries has fueled criticism of Uribe at home and in the United States, where Democratic lawmakers are debating whether to approve a free-trade deal and renewed military funding for Colombia.

The paramilitaries began in the 198Os as self-defense groups set up by rich farmers seeking protection from leftist rebels where the state's presence was weak.

Rights groups have long said collusion between the army and militias was an open secret and worry that paramilitaries have kept their criminal networks intact.

Uribe says the arrests of lawmaker allies show justice is working and that he welcomes all investigations to purge his government of criminal influence. Rights groups say the scandal has unearthed the depth of collusion among militias and politicians and some elements in the armed forces.

Mancuso, who has admitted to murders and massacres in the name of counterinsurgency, promised his testimony starting on Tuesday would reveal the identities of all politicians, business leaders, military officers and even multinational companies who collaborated with his illegal organization.

U.S. banana giant Chiquita Brands International recently pleaded guilty to charges a local unit paid protection money to paramilitaries. It agreed to a settlement of $25 million in the United States.

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