By Mica Rosenberg

PLAN DE SANCHEZ, Guatemala, Feb 9 (Reuters) - A kind of justice came to survivors of a massacre in Latin America's bloodiest 20th-century war when Guatemala began compensating villagers this week for killings 24 years ago.

Residents of the remote mountain hamlet of Plan de Sanchez said the first government payments had begun showing up in bank accounts from a landmark $8 million compensation package for the army-led slaughter of more than 200 people, mostly Mayan women and children.

On July 18, 1982, soldiers and allied militias on anti-insurgency duties overran the hamlet, then raped and tortured villagers, herded them into a building and blew it up with hand grenades.

It was one of the most infamous massacres by the army in a fight against leftist rebels. More than 200,000 people died in Guatemala's 36-year civil war, which ended in 1996. No one has been prosecuted for the Plan de Sanchez massacre and few have faced justice for other rights abuses during the war.

In a ruling last year, the Inter-American Court of Human Rights in Costa Rica awarded 317 family members close to $25,000 each to be paid by the Guatemalan government. It was the first award of its kind by the court.

"In Guatemala, the attitude of the politicians was to deny the undeniable, excuse the inexcusable," said Frank La Rue, the presidential human rights secretary and former head of the rights organization that originally brought the case.

"The attitude of the court was completely the opposite. We had to recognize the international responsibility of the state and ask for forgiveness from the victims."

Guatemala's human rights office opened bank accounts for the beneficiaries, who live mainly from subsistence farming. They will receive three installments of $8,000 each.

While the victims say there is no price for lost family members, the cash is significant in a country where the yearly minimum wage is about $1,500.

NEVER ENOUGH

For survivors, mostly widowers who returned from working the fields to find their dead families, no amount is enough. Many fled the area in fear after the killings.

"We lived like savage animals in the mountains for three years," said Salvador Jeronimo Sanchez, who told his story in the small village chapel where the victims are buried, their names written on the walls.

"We lost everything, not just our families but our crops, our houses, our traditional clothing. It cost us to rebuild our lives."

The government has promised the next two payments will arrive in December this year and at the end of 2007.

Bureaucratic hurdles have delayed the money for more than 100 of those eligible for compensation. Some are listed more than once, others have died and many emigrated to the United States.

Hurricane Stan, which devastated Guatemala last year, scuttled plans for a lump-sum payment, due to the high recovery costs for the government.

The case brings some closure to a rights process that began in 1994, two years before insurgents and government forces signed peace agreements that ended the war.

Gen. Efrain Rios Montt ruled during the bloodiest years of the war, when the army launched a "scorched-earth" campaign against suspected guerrilla sympathizers and even wiped some villages off the map. Rights leaders want to prosecute him for genocide.

A 1999 U.N.-backed truth commission documented more than 600 massacres, largely committed by the army, during the war, but Plan de Sanchez was the first village to press for an international case.

"Other communities didn't want to give any information," said Buenaventura Manuel Jeronimo, who lost 14 relatives in the massacre. "People were afraid, no one wanted to organize because they thought it could happen again."

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