Updates with end of talks, news conference)

By Elif Kaban

KIGALI, April 2 (Reuter) - European and U.S. aid chiefs ended a visit to Rwanda on Tuesday urging it to do more on two major unresolved issues after the 1994 genocide -- too many refugees outside the country and too little justice inside. Emma Bonino, European Union Commissioner for humanitarian affairs, and Brian Atwood of U.S. Agency for International Development (USAID) praised Rwanda for its progress at a joint news conference but said a lot more had to be done. "We acknowledge the progress achieved, but we also expressed our concerns over the judicial system. There were 27,000 people in prisons a year ago, now there are 70,000," Bonino said after talks with Rwanda's leaders. Accompanied by senior European and U.S. diplomats, Bonino and Atwood arrived in Kigali on Tuesday on the first joint EU-U.S. aid mission to seek solutions to one of the world's most costly aid operations. They represent two of Rwanda's biggest donors, which are looking for ways out of what is turning into a Central Afri

can crisis that runs the risk of continuing indefinitely. The question now for the donors is how long can they sustain assistance to Rwanda given the deadlock over 1.7 million Hutu refugees who fled to Zaire, Burundi and Tanzania after the genocide and are too scared to come home. "We as the international community are spending $1 million a day here in aid. We're desperate to solve the problem. Every plan for refugees to come home has been suggested," Atwood said. Added Bonino: "There are confidence-building problems for refugees to return. The need to put in place a justice system is one of the most important measures to build confidence." Relations between Rwanda's government, whose Tutsi-led army took power after the genocide of up to a million Tutsisand Hutu moderates, and its donors turned sour over the expulsion of more than 40 aid agencies in December and the introduction of taxes on imports of aid equipment this year. Diplomats said last week's visit to Brussels by Prime Minister

Pierre-Celestin Rwigema failed to smooth the ties. His talks with European officials were "very problematic and uneasy", one diplomat said. Atwood said the government was moving in the right direction. "They've done a good job. this is a government that hasn't a lot of resources and trying to do most rudimentary things like getting furniture for ministries." He later told Reuters: "They've got to start moving on justice otherwise the prisons will be more and me congested. No justice system is perfect, but I don't think I'd want to be judged by some of these people being trained now." Senior diplomats said Bonino and Atwood had difficult talks with President Pasteur Bizimungu and military strongman Paul Kagame in Kigali. "It has to do with the psychology of this government. They are over-assertive. But donors are very concerned with the expulsions of aid agencies when more international presence is needed in the field to keep the army under control," said one. "They start from a very diffe

rent platform...Sometimes we have a problem of speaking the same language. They don't trust the Europeans very much, the Americans less so."