UPDATE 1-Venezuela's Machado rejects possibility of substitute opposition candidate

(Adds comment from government official Rodriguez in paragraph 9)

CARACAS, Jan 29 (Reuters) - Venezuelan opposition candidate Maria Corina Machado on Monday said she would not move aside in favor of a substitute despite a decision by the country's supreme court last week to uphold a ban barring her from holding office.

The Friday ruling bars Machado, a 56-year-old industrial engineer, from registering for presidential elections scheduled for the second half of this year, with the court saying she supported U.S. sanctions, had been involved in corruption and had lost money associated with Venezuela's foreign assets.

"There is no retreat. We have a mandate and we will complete it," Machado told a press conference in Caracas. "A substitute candidate is the plan by those who don't want change and our plan is change, period."

The ruling was "judicial crime" she said, adding there will be many obstacles still to overcome but there will be elections this year.

The United States had conditioned a continuation of sanctions relief - granted in October as part of an electoral deal signed in Barbados - on Venezuela President Nicolas Maduro freeing prisoners including "wrongfully detained" Americans, and making progress toward removing bans on a number of opposition figures.

Venezuela in December released 24 of its own citizens and 10 Americans in exchange for freedom for a Maduro official and the extradition of a Malaysian businessman wanted by the U.S.

The U.S. is reviewing its sanctions policy, the State Department said on Saturday.

Machado, who won an October primary by a landslide, has never backed the idea of appointing a successor. She also asked on Monday for a representative at talks between the opposition and Caracas.

Lawmaker Jorge Rodriguez, who heads the Maduro administration's team in the negotiations, said the government is making efforts to revive the talks. Elections will be held in 2024, he added, but Machado's situation has been decided.

The U.S. may partially reinstate sanctions following the ruling, analysts said.

"We anticipate a partial reinstatement of the sanctions regime," BancTrust & Co said in a Monday note, adding that a full reinstatement was unlikely because sanctions have proved ineffective at promoting political change.

Relaxations on bond trading are likely to remain, JPMorgan economists said, though the outlook for oil sanctions relaxation was more uncertain because of economic benefits to both countries, high migration of Venezuelans to the U.S. and war in the Middle East and Eastern Europe. (Reporting by Vivian Sequera in Caracas and Julia Symmes Cobb in Bogota; Additional reporting by Gary McWilliams in Houston and Marc Jones in London; Editing by Bill Berkrot and Richard Chang)