* Amnesty latest concession by government
* Opposition renews call for early election
By Hasmik Mkrtchyan
YEREVAN, May 26 (Reuters) - Armenia's parliament approved an amnesty on Thursday that will free hundreds of inmates, including six anti-government activists, in a vote welcomed by the opposition as a step toward dialogue with the government.
Lawmakers in parliament, where President Serge Sarksyan's supporters hold a majority, voted in favour of the plan to release nearly 400 inmates in an amnesty marking 20 years since Armenia gained independence in the breakup of the Soviet Union.
About 380 others will have their sentences shortened by the amnesty, which is to take effect over the next few months.
It was the latest concession to opponents of Sarksyan, whose rule has been clouded by deadly clashes after his election in 2008 and a 14.2 percent economic contraction the following year in Armenia, Russia's closest ally in the South Caucasus.
Six opposition activists, jailed after the election protests in which 10 people were killed, are to be released.
A senior official in former President Levon Ter-Petrosyan's opposition Armenian National Congress party welcomed the amnesty plan but indicated Sarksyan's opponents would continue to press for early elections.
"This opens the door to dialogue over the issue of the formation of legitimate national authorities through early elections," Armenian National Congress coordinator Levon Zurabyan told Reuters.
A series of opposition protests this year has put pressure on the government, which is grappling with high inflation and increasing poverty following the economic downturn.
Some 5,000 people turned out on April 28 for a protest on Yerevan's central freedom square, the first time authorities granted permission for a rally there since the clashes in 2008.
Armenia's leaders say they want to build a European-style democracy and have won Western praise for allowing contested elections. Opponents say the country is run by a clique which refuses to give rivals access to political power or influence. (Editing by Steve Gutterman and Philippa Fletcher)