Explosions in Bolivia's Capital

Dynamite and tear gas explosions across Bolivia's capital just hours after the country's president offered to resign.

That offer has done little to halt demonstrators demanding more power for Bolivia's poor Indian majority. Some shout slogans against President Carlos Mesa's unraveling free-market government. Others are calling for early elections. President Carlos Mesa, his 19-month-old government falling apart, announced his resignation in a nationally televised address.

"In a nation that boasts more coups than years as an independent republic, President Carlos Mesa's resignation is not surprising and is more likely this time to be accepted by the Bolivian Congress," said CBS News Foreign Affairs Analyst Pamela Falk. "Unlike former Bolivian presidents who have fled in small boats across Lake Titicaca, President Mesa is attempting to leave the country with a clean slate, allowing the legislature to chose a president who is perceived to be more responsive to the nation's poor. "

Mesa addressed his countrymen late Monday, hours after the riot police acted with force to try to scatter more than 100-thousand protestors and demonstrators attempting to lay siege to the Government Palace. This was the largest demonstration in La Paz in weeks.

Disgruntled miners created thunderous booms by tossing dynamite sticks. The riot police dragged them from their yellow dump trucks parked in blockades -- beating some of them. Soldiers are taking up posts around the city. More than 500 protesters were turned away by acrid tear gas as they tried to close in on Mesa's seat of power. No injuries were immediately reported, but police made 22 arrests, among them protesters accused of brandishing dynamite, according to state television Canal Siete.

The city has been struggling under weeks of blockades, food shortages and a transit strike. The protest marked the fourth week of unrest in which protesters have also thrown up road blockades, strangling the capital and causing gas and food shortages in this impoverished Andean nation of 9 million people.

The protests have steadily increased since Bolivia's Congress last month raised taxes on foreign oil companies that have descended on the country to develop its natural gas reserves — the second largest in South America after Venezuela.

The crisis pits Indian and labor groups from the poorer eastern highlands, including La Paz and its poor satellite city of El Alto, against ruling blocks from Santa Cruz in the east and the oil-rich gas fields to the south that are pursuing greater autonomy.

A historian turned politician, Mesa had no political sponsorship when he was thrust into the presidency in October 2003.This resignation was President Carlos Mesa's second offer to step down in three months. Mesa also submitted his resignation during similar protests in March, arguing the country was becoming ungovernable. Lawmakers rejected his offer, essentially giving him a new mandate.

Senate President Hormando Vaca Diez, who would be next in line to succeed Mesa, said he expected Mesa to stay on at least until Congress decides on a political transition. Vaca Diez said he was opening urgent consultations with all parties on when and where to call an emergency session of the legislature. Many indigenous leaders have openly declared they would repudiate a Vaca Diez presidency, or even the next-in-line, House leader Mario Cossio, both from traditional parties.

Lawmakers had hoped to calm tensions in a country where anti-globalization anger runs high. But the tax increase touched off fresh demands for the nationalization of the oil industry and a new constitution giving more clout to Indians, who represent about half the population.

One scenario, analysts said, included the possibility the third in line, the popular Supreme Court President Eduardo Rodriguez, could assume the presidency to then call early elections.