By Aaron Maasho

ADDIS ABABA (Reuters) - A European Union parliamentary delegation urged Ethiopia on Wednesday to release journalists and opposition politicians jailed under an anti-terror law, and revise the legislation that critics say is used to stifle dissent.

Ethiopian opposition parties routinely accuse the government of harassment and say their candidates are often intimidated in polls. All but two of the 547 seats in the legislature are held by the ruling party.

Critics point to a 2009 anti-terrorism law that makes anyone caught publishing information that could induce readers to commits acts of terrorism liable to jail terms of 10-to-20 years.

Last year, an Ethiopian court handed sentences of eight years to life to 20 journalists and opposition figures on charges of conspiring with rebels to topple the government.

"We note flaws in the impartiality of the judicial system," said Barbara Lochbihler, who led the delegation to the Horn of Africa country.

"Therefore we also call on the Ethiopian authorities to release all journalists, members of the opposition and others arbitrarily detained or imprisoned for exercising their legitimate right to freedom of expression, freedom of association, as well as freedom of religion and belief."

Government officials were not immediately available for comment, but they often dismiss claims that they are cracking down on dissent. They say the law is needed to fight separatist rebels and armed groups they say are backed by arch-foe Eritrea.

The delegation's visit came after thousands staged an anti-government procession in June in the first large-scale protest since a disputed 2005 election ended in street violence that killed 200 people.

A smaller protest in the northern towns of Gonder and Dessie followed over the weekend, and opposition officials said dozens have since been detained ever since.

The delegation said they were denied access to a prison where some of the journalists and politicians were being held.

"We acknowledge and recognize the highly volatile situation of Ethiopia's immediate neighborhood," Lochbihler said.

"However, when we look at the anti-terrorism legislation in this country, you think (about) how this legislation is implemented and being understood and being interpreted. This leads to a lot of arrests."

Analysts say the opposition may have found renewed vigor since the death last year of Prime Minister Meles Zenawi, who was praised abroad for delivering strong economic growth but criticized for keeping a tight grip on power for 21 years.

(Editing by Duncan Miriri; Editing by Michael Roddy)