July 4 (Reuters) - Nicaraguan Catholic Bishop Rolando Alvarez was released from prison late on Monday, a diplomatic source said, marking a possible turning point in the government's prolonged crackdown on the Catholic Church. The diplomatic source said on Tuesday that negotiations between the government and the country's Catholic bishops were going on over Alvarez's future, and the prelate was at the Catholic episcopal compound in the capital. The source, who declined to be identified, added that talks included the possibility that the bishop might be expelled from the Central American country or otherwise sent into exile. If the bishop refused to leave the country, he could be returned to prison, the source said. Earlier in the day, the news outlet Confidencial reported that Alvarez had been released on Monday night, citing church and diplomatic sources.

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Persons: Nicaraguan Catholic Bishop Rolando Alvarez, Alvarez, Daniel Ortega, Pope Francis, Ortega's, Ismael Lopez, David Alire Garcia, Robert Birsel Organizations: Nicaraguan Catholic, Catholic Church, Central American, Thomson Locations: Nicaraguan, Matagalpa, United States