By Aung Hla Tun

YANGON (Reuters) - Myanmar's opposition leader Aung San Suu Kyi agreed on Monday to end her party's boycott of parliament, setting aside her first major dispute with the government since winning by-elections and clearing the way for what could be an acceleration of reforms.

Suu Kyi and her party will make their historic debut in the assembly on Wednesday after backing down over the wording of an oath. She agreed to swear to protect a constitution drafted under military control that she says is undemocratic.

"In politics it is essential to give and take," the Nobel Peace Prize laureate told reporters after a party meeting.

"As a gesture of respect to the desires of the people and in consideration of the requests made by lawmakers from democratic parties and independent lawmakers, we have decided to attend the parliament ... We will go there as soon as possible and take the oath."

Suu Kyi's change of heart came as U.N. Secretary-General Ban Ki-moon was addressing parliament in the capital, Naypyitaw. She is due to meet Ban in Yangon on Tuesday before travelling to Naypyitaw for Wednesday's parliamentary session, party officials said.

Her National League for Democracy (NLD) boycotted general elections in November 2010, when Suu Kyi was under house arrest, saying the poll was rigged in favor of the military-backed Union Solidarity and Development Party (USDP).

The USDP won an overwhelming victory, but a new government under President Thein Sein embarked on political and economic reforms after 50 years of military rule and persuaded Suu Kyi to enter the political process.

The NLD won all but one of the 44 seats it contested in April 1 by-elections after a campaign in which Suu Kyi, who won one of the seats, made the amendment of the 2008 constitution drawn up under military supervision a central theme.

The charter gives the military wide powers, including the ability to appoint cabinet members, take control in a state of emergency and occupy a quarter of seats in parliament.

The NLD wanted to replace the words "safeguard the constitution" with "respect" it in the parliamentary oath. But the ruling army-backed party rejected the NLD's demand.

Suu Kyi said the by-election victory showed the support of the people and her party had to give in to their wishes.

"We need to show practically that we have real will to cooperate and compromise," she said.

Although the NLD has only a handful of seats compared with the USDP and the military, her presence in parliament will keep the focus on reforms and could even lead to their acceleration.

APPLAUSE FROM BAN

U.N. chief Ban welcomed Suu Kyi's announcement.

"I will commend her for working for a greater cause and the interests of the Myanmar people," he told reporters in Naypyitaw.

"Politicians have different political principals but genuine leaders should be able to overcome and be able to demonstrate flexibility. This is encouraging. I respect her decision."

He later met Thein Sein for dinner and said the president was happy with the outcome. "He also believes this will contribute to a harmonious working relationship. He seemed satisfied with the resolution of this very sensitive issue."

In his speech to parliament, Ban urged Western powers to ease sanctions further to help Myanmar and even suggested the country could become a model for democracy after decades of brutality and isolation under military rule.

Ban said he had no doubt that, under the year-old civilian government, Myanmar would catch up with its Asian neighbors, but he warned of "perils and pitfalls" on a difficult road.

"Today, I return to a new Myanmar, a Myanmar that is making history. The dramatic changes sweeping Myanmar have inspired the world. Confrontation and repression were tried, and they failed.

"More needs to be done. Today, I urge the international community to go further in easing or suspending trade restrictions and other sanctions."

Ban's visit is his first since July 2009, when Senior General Than Shwe ruled Myanmar at the head of a regime that brutally suppressed dissent.

But under Thein Sein, the junta's former fourth-in-command, the government has eased media censorship, legalized trade unions, freed more than 600 political prisoners and begun an economic overhaul. It has also struck ceasefire deals with all but one of its ethnic minority rebel groups.

Ban said he was convinced about Thein Sein's sincerity and urged him to address the U.N. General Assembly.

"I could see from his remarks he has a genuine and very strong commitment," Ban said. "I know his character and his leadership and I'm quite convinced he will contribute and be committed to moving forward in political reform.

"I told him to speak to the world his vision and commitment for a democratic Myanmar."

(Additional reporting by Martin Petty in Naypyitaw; Writing by Alan Raybould; Editing by Maria Golovnina)