BEIJING, Aug 24 (Reuter) - China hit back on Sunday against charges by a U.S. congressman that it exerted a "death grip" on Tibet, saying Tibetans were happier and wealthier and the only monks in jail were those seeking independence.

Tibetans enjoyed full religious freedom while crackdowns on those who used religion in their campaign to end Chinese rule were aimed at safeguarding the religious rights of Tibetans, Raidi (Rpt Raidi), chairman of the regional People's Congress, or parliament, told the official Xinhua news agency.

"All people with a sense of justice, including the Tibetan people, are enraged by his actions," Raidi said in an interview to rebut charges by Virginia Republican Congressman Jim Wolf that China maintained a "death grip" on the Himalayan region.

"The anti-China forces in the United States and other Western nations...have always schemed to look for a bone in an egg, confound right and wrong, and confuse and poison people's minds regardless of the happy lives the Tibetan people are leading," Raidi said.

He dismissed allegations by Wolf, who visited Tibet unannounced on Aug 9-13, that the Tibetan capital, Lhasa, was being swamped by government-sent Han Chinese settlers and that Tibet was disappearing.

"There are followers praying with prayer wheels in hand in all major monasteries in Lhasa and no one interferes in their activities," Raidi said, saying the region had 46,000 monks and nuns who were allowed to worship freely.

He made no mention of government work teams sent into Tibet's monasteries in the past few years to persuade monks to abandon their anti-Chinese views and to give up their allegiance to the region's exiled god-king, the Dalai Lama.

Raidi defended crackdowns by the authorities on anti-Chinese unrest in the region, saying separatists opposed to Beijing rule were acting under the cloak of religion.

"The reason to crack down on activities held by the separatists who are acting under cover of religion is to protect the majority of the religious believers," he said.

China has clamped down repeatedly over the last decade on sporadic outbursts of pro-independence unrest, usually led by monks and nuns, sentencing many to long prison terms and even imposing martial law on occasion. It maintains a large military presence in the restive region.

Wolf urged Washington to press China for the release of what he called 700 prisoners of conscience.

While promising freedom of worship, Raidi said religion would be restricted to temples.

"We will not allow religion to interfere with administrative and judicial matters, education and marriage affairs," he said.

Wolf, a religious freedom champion, said in Washington last week that urgent action was needed to save the region's unique Buddhist culture.

Raidi said no such dangers existed and added that the Dalai Lama had been "abandoned" by Tibetans.

The Dalai Lama fled into exile after a failed uprising in 1959 and was awarded the Nobel Peace Prize in 1989 for his peaceful campaign for more autonomy for his homeland. China blames him for fomenting the anti-Chinese unrest.

Raidi insisted that the Tibetan language was used in all official documents and local media, but did not say whether it was the medium of teaching in schools.

He scoffed at reports that Chinese were swamping Lhasa, saying Han Chinese accounted for only three percent of Tibet's 2.3 million people. He gave no breakdown for Lhasa.

Tibet was seeing the fastest economic growth in its history, with gross domestic product rising in double-digit figures while the annual net income of farmers and herdsmen had reached 875 yuan ($117), Raidi said. That compares with a national average of 1,900 last year.