MEXICO CITY (AFP) - Mexican President Felipe Calderon said late Monday his country saved thousands of lives by taking the lead in the "global battle" against the swine flu virus, as he promised measures to get Mexico back to normal.

Mexico - the epicentre of the epidemic affecting 21 countries - "has taken the lead in the global battles against the virus," he said in a televised address after his government said it had the epidemic under control.

Thanks to its "responsible" actions, "thousands of lives have been saved not only in Mexico but in the world," he said.

But he also warned "this virus is still circulating" and urged citizens to take precautions, such as regular hand-washing.

The latest official flu toll stood at 26 dead and another 776 people infected, after lab tests on more than 2,000 suspect cases detected in recent weeks.

"We are seeing a declining trend in the number of suspect and confirmed cases" because "the measures taken ... have been effective," Health Minister Jose Angel Cordova said earlier.

The easing of restrictions was welcomed by Mexicans, most of whom spent a five-day holiday weekend at home at Calderon's urging.

"As a saleswoman, I think that's great. We haven't been able to earn money to eat," said Leidi Molina, a 23-year-old managing a handicrafts shop in the centre of the capital.

"It's a relief because we've had enough of being stuck at home all day," said Ana Maria Rodrigo, a 40-year-old teacher.

The hospitality sector in the capital said the closure of indoor entertainment places had cost the economy 100 million dollars a day and put 450,000 jobs at risk.

Even harder hit was Mexico's tourism industry, which accounts for eight percent of economic output and is the third-biggest legal source of foreign revenue.

Hotels in Mexico City were down to 10 percent occupancy, and foreign visitors were virtually absent from the city centre. Sites such as Mexico's famed Aztec pyramids were off-limits.

Calderon said he would roll out a fiscal stimulus package to mitigate some of the damage, including lowering port taxes on cruise ships to encourage them to return.

Mexico's stock market on Monday reacted to the assessment that the flu crisis was waning by ending the day five percent higher.

The government has defended its handling of the epidemic, particularly its early ringing of the alarm bell and implementation of measures based on a worst-case scenario of up to 50,000 deaths.

At the peak of the crisis early last week, the health minister had spoken of 159 "probable" deaths.

The World Health Organization (WHO) subsequently warned a pandemic was "imminent," and has maintained that level of alert.