KIGALI (AFP) - As Rwanda marks 20 years since its 1994 genocide, the government is seeking to stress the strides the country has made since those dark days, despite international concern over its hardline leader.

Fiercely proud of its legacy, Kigali is displaying a country at peace, enjoying some of the best security on the continent and hailed by global financial institutions for its pro-reform, business-friendly agenda.

But the seemingly hardening stance of strongman Paul Kagame, Rwanda's president, is casting a shadow over the country's relations with the outside world.

Accused of backing rebel warlords who recruit child soldiers in neighbouring Democratic Republic of Congo and suspected of eliminating exiled dissidents, Kagame now appears to be suffering a backlash.

On January 1st Patrick Karegeya, a one-time close ally of Kagame turned fierce critic, was found dead in a luxury Johannesburg hotel. South African police found a bloodied towel and a rope, and said Karegeya might have been strangled.

Critics of the regime immediately pointed the finger at Kigali, and Kagame responded with an ambiguous, hawkish tone. Without mentioning the Karegeya case, the president simply said that "treason brings consequences".

"Anyone who betrays our cause or wishes our people ill will fall victim.

What remains to be seen is how you fall victim," he said.

His comments prompted a surprisingly stiff rebuke from Washington, which had been a staunch supporter of Kagame ever since his rebel army defeated Hutu extremists and ended the genocide of the Tutsi minority in 1994.

"We condemn the murder of former Rwandan government official, Colonel Patrick Karegeya, in South Africa, where he lived in exile," State Department spokesman Jen Psaki told a press briefing last week, adding the US welcomes South Africa's "prompt and thorough investigation" into Karegeya's death.

Psaki also said the US was "troubled by the succession of what appear to be politically motivated murders of prominent Rwandan exiles", and said Kagame's comments were a cause for "deep concern".

The criticism of Kigali comes amid increasing unease in Washington, which had last year suspended some of its aid to Rwanda over its support for the M23, a rebel group based over the border in the resource-rich east of the DR Congo.

Rwanda denied backing the group, but diplomats say it was subjected to intense pressure to back off and the M23 were subsequently defeated.

"The US used to be one of the biggest supporters of the Rwandan president," said Paul Simon Handy of the South Africa-based Institute for Security Studies (ISS), adding that Washington liked Kagame's "capacity to manage, to govern, to take Rwanda to the next step."

"It's clear that the Obama administration has a completely different approach (to Rwanda) from those of the Clinton and Bush administrations," Mr Handy said, saying the current administration "seems less inclined to tolerate human rights abuses".

A European diplomat said there had been a reluctance to criticise Kagame, mainly because of "Western guilt for having failed to prevent the genocide and essentially having stood by and watched" while close to a million of Rwanda's ethnic Tutsis were slaughtered by Hutu extremists.

"You cannot dispute that Kagame has also done a lot of positive things for Rwanda. His record on corruption and economic reforms are an example to the rest of the continent," said the diplomat, who asked not to be named.

"He's also brought peace and stability to Rwanda, that's undeniable. The problem is that there are certain aspects of him that are making us feel, well, deeply uneasy."

But in Rwanda, reaction to criticism is increasingly one of defiance - with the country signalling it does not take kindly to criticism from an international community that stood by and did nothing while the genocide was in full swing.

"It's not the first time that a US official tries to lecture an African Head of State," was the response from Olivier Nduhungirehe from the Rwandan mission to the UN. He added that the US should be more "concerned about al-Qaeda" and also let Rwanda deal with "terror" threats.

Rwandan Foreign Minister Louise Mushikiwabo, dismissed the idea of a deterioration in US-Rwandan relations.

"Rwanda and the United States have enjoyed strong ties that cut across the political spectrum, especially after the 1994 genocide .... Of course, as in any relationship, there are ups and downs, but we always manage to work them out," she said.

Kagame himself also appears unrattled. Asked by the French weekly Jeune Afrique who killed Karegeya, he replied bluntly that the answer was of no importance to him.

"For those who ask that question, even though they know perfectly well that this type of individual stood for violence and terrorism, I have this answer: terrorism has a price, treason has a price. People are killed the way they themselves killed," Kagame told the magazine.

"Each man gets the death he deserves," he said.