UPDATE 2-Peru's Congress repeals laws behind Amazon clashes

* Vote could delay foreign investment

* Move hailed as victory for indigenous people

(Adds indigenous call to end blockades, quotes)

LIMA, June 18 (Reuters) - Peru's Congress overturned two controversial land laws on Thursday that ignited clashes between police and indigenous protesters in the Amazon rain forest two weeks ago, killing at least 34 people.

The vote to throw out legislative decrees 1090 and 1064 could delay foreign investment in mining and energy projects and may prompt Peru and the United States to reevaluate clauses of their free-trade pact. [ID:nN06294730]

The violence may also force President Alan Garcia to reshuffle his cabinet in July, when Peruvian leaders traditionally announce changes. Garcia's chief of staff, Yehude Simon, has already said he will step down in coming weeks for failing to prevent the bloodshed.

Garcia, a promoter of private investment, issued a series of decrees last year under powers Congress gave him to implement the U.S. trade deal and create a framework to regulate investment in the Amazon.

After protests turned violent, he backtracked and asked Congress to repeal two of the most divisive laws, though others remain in effect.

"This is a historic day for all indigenous people in Peru," Daysi Zapata, director of the Indian rights group Aidesep, said alongside dozens of indigenous people who wore traditional tunics and headdresses to watch the vote in Congress.