* Holocaust historian says Hungary tries to downplay past
* Hungary criticised for German occupation memorial
* Anti-Semitism a stubborn problem in Hungary
By Marton Dunai
BUDAPEST, Jan 26 (Reuters) - An American historian said on Sunday he was returning an award he received from the Hungarian state in protest at what he called the government's attempt to erase Hungary's role in the Holocaust.
Romanian-born Randolph Braham, who settled in the United States after World War Two, received Hungary's Order of Merit in 2011 for his life's work, including on the Hungarian Holocaust.
"I have followed the latest developments in Hungary with great concern," Braham wrote in an open letter posted on several news websites. "I was shocked, as were surely others, at the past few years' campaign to whitewash history."
"They wish ... to excuse Hungary from the responsibility for the active role it played in annihilating nearly 600,000 of its Jewish citizens," wrote Braham, author of "The Politics of Genocide: Holocaust in Hungary."
Jewish groups have criticised the centre-right government of Prime Minister Viktor Orban for what they say is its lacklustre attempt to fight anti-Semitism.
Orban, favourite to win re-election in April, has said he would do everything to stamp out growing anti-Semitism in a country where a far-right party, Jobbik, openly uses anti-Semitic rhetoric and last November unveiled a statue of wartime leader Miklos Horthy, an ally of Adolf Hitler.
Last week a Jewish group threatened to boycott Holocaust commemorations this year over plans to erect a monument to the country's German occupation in 1944.
Jews said that pushed the blame for the genocide solely onto Germans and obscured the role of Hungarians.
In Hungary the Holocaust began years before it came under direct German occupation in 1944. Under the rule of Horthy, there were anti-Jewish pogroms, several reported instances of mass killings and the deportation of thousands of Jews to government-run labour camps.
Occupying German forces then received willing help from Hungarian authorities in deporting 437,000 Jews within a few weeks in 1944.
"(The) national monument to the German occupation... is a cowardly attempt to deflect attention from the role the Horthy regime played in the annihilation of Jews," Braham wrote.
"It blurs the Holocaust with what they say is the suffering of Hungarians during the German occupation ... which was met with general applause rather than resistance, as proven by historical facts." (Editing by Robin Pomeroy)