Strike against layoffs grips Puerto Rico capital

* Strikers' protests converge on financial district

* Stoppage called to protest large public sector layoffs

* Governor appeals for calm, says layoffs are necessary

SAN JUAN, Oct 15 (Reuters) - A general strike in Puerto Rico by public workers protesting government layoffs gripped the capital's financial district on Thursday, shutting many businesses and schools and disrupting some official agencies.

Labor unions in the U.S. Caribbean island territory called the 24-hour strike to protest the firing of thousands of workers by the government, which is trying to shrink a $3.2 billion budget deficit.

Governor Luis Fortuno, who last month announced the firing of 17,000 public workers, appealed for calm and said layoffs would avoid further downgrade of the island's credit rating.

"Nobody supports firings, but there was no other option," he told local media. Over 4,000 workers were fired in June.

Puerto Rico's unemployment rate was 15.8 percent in August, higher than any U.S. state.

The island, which has a population of nearly 4 million and is a manufacturing hub for petrochemical, pharmaceutical and technology companies, as well as a major tourism destination, has been in recession for more than three years.

Police guarded government buildings in San Juan as protesters converged on the Hato Rey financial district near Plaza Las Americas, the Caribbean's largest mall.

The mall, with 300 stores and more than 10,000 employees, shut its doors, as other area businesses and private schools.

With sound trucks blasting music, strikers chanted "Struggle yes, surrender no" and held placards that read "Work not Welfare."

Truck drivers tied up traffic in early morning protests and many streets were empty as residents opted to stay home.

Authorities said they would ensure the island's ports, airports and major roadways were not blocked by strikers.

Fortuno says the public sector layoffs are necessary to cut government spending by $2 billion annually.

His administration has cut spending, frozen hirings, levied temporary taxes and increased public infrastructure investment and low-cost financing to jump-start the struggling economy.

The government is hoping avoid a downgrade of Puerto Rico's bond rating to junk, or non-investment, grade. Moody's and Standard & Poor's rate Puerto Rico a notch above junk level.

Fortuno has argued a credit downgrade would inflict massive harm on the economy, costing many more jobs.

Puerto Rico's economy shrank a record 5.5 percent in the 2009 fiscal year that ended June 30. The Puerto Rico Planning Board said the decline showed the economy had touched bottom and predicted 0.7 percent growth in fiscal 2010. (Writing by Pascal Fletcher; editing by Jim Loney and Doina Chiacu)