WRAPUP 9-Japan plays down fears of setback in nuclear crisis

* Conflicting views on source of high radiation in water

* People in zone 20-30 km from plant encouraged to leave

* Over 10,000 dead; 17,500 people missing

* China says travellers from Japan found contaminated

(Adds officials play down possibility of rupture, TEPCO)

By Mayumi Negishi and Kazunori Takada

TOKYO, March 25 (Reuters) - Workers burned trying to cool a
crippled Japanese nuclear plant were exposed to radiation levels
10,000 times higher than normal, officials said on Friday, but
they played down suggestions that a reactor was leaking.

A rupture in a reactor would mean a serious reversal
following days of slow progress in containing radiation leaks
after a killer earthquake and tsunami tore through the Fukushima
nuclear power complex two weeks ago.

Over 10,000 people were killed and 17,500 remain missing in
the disaster, according to latest police figures. But even those
numbers have been eclipsed by the possibility of a catastrophic
meltdown at Fukushima, just 250 km (150 miles) north of Tokyo.

More than 700 engineers have been working in shifts around
the clock to stabilise the six-reactor Fukushima complex but
they pulled out of some parts when three workers replacing a
cable at the No. 3 reactor were exposed to high contamination on
Thursday, officials said.

Two were taken to hospital with possible radiation burns
after radioactive water seeped over their boots.

"The contaminated water had 10,000 times the amount of
radiation as would be found in water circulating from a normally
operating reactor," said Japanese nuclear agency official
Hidehiko Nishiyama.

"It is possible that there is damage to the reactor."

But Nishiyama later told reporters: "It could be from
venting operations and there could be some water leakage from
pipes or from valves, but there is no data suggesting a crack."

However, adding confusion to the picture, plant operator
Tokyo Electric Power Co said it was possible the
contaminated water had come from the reactor's core.

Also on Friday, Japan prodded tens of thousands of more
people living near Fukushima to leave, while China said two
Japanese travellers arriving in the country were found to have
exceedingly high radiation levels.

Hideo Morimoto, director at the Agency for Natural Resources
and Energy, also said the incident at the No. 3 reactor was not
serious.

"I feel if the pressure vessel has been seriously damaged,
then far more radiation would have leaked,"he said.

However, the reactor is also the only one to use plutonium
in its fuel mix, which is more toxic than the uranium used in
the other reactors.

U.N. nuclear watchdog IAEA said a total of 17 workers had
received elevated levels of radiation at Fukushima since the
operations began, but said the other 14 did not suffer burns.

RADIATION IN TRAVELLERS

China's General Administration of Quality Supervision,
Inspection and Quarantine said two travellers who arrived in the
eastern city of Wuxi from Tokyo were found to have high levels
of radiation although they presented no risk to others.

"Tests showed that the two travellers seriously exceeded the
limit," it said in a statement.

Until now, no one in Japan except workers at the stricken
plant has been found with seriously elevated radiation levels,
and Japan's foreign ministry noted that as of March 18 the
International Civil Aviation Association had declared that
screening of airline passengers from Japan was not necessary.

Japan's chief cabinet secretary said 130,000 people living
near Fukushima should consider leaving, although he insisted it
was because getting supplies to the region was difficult and
maintained it was not an evacuation order.

"Given how prolonged the situation has become, we think it
would be desirable for people to voluntarily evacuate in order
to meet their social needs," Yukio Edano said.

Japan evacuated a 20-km (12-mile) zone around the Fukushima
nuclear plant after the March 11 earthquake and tsunami. Seventy
thousand people left their homes.

Edano has maintained there was no need currently to expand
the evacuation zone, but an official at the Science Ministry
confirmed that daily radiation levels in an area 30 km (18
miles) northwest of the plant exceeded the annual limit.

Safety fears at the plant and beyond -- radiation particles
have been found as far away as Iceland -- are compounding
Japan's worst crisis since World War Two.

RECEDING

Despite the increased radiation reports, there has been some
progress in containing the crisis at Fukushima.

Two of the reactors are now regarded as safe in what is
called a cold shutdown. Four remain volatile, emitting steam and
smoke periodically, but work is advancing to restart water pumps
needed to cool fuel rods inside those reactors.

The United States has been offering aid to its ally Japan,
and two of its barges will together provide 525,000 gallons (2.0
million litres) of water for cooling the reactors.

But heightened by widespread public ignorance of the
technicalities of radiation, alarm has been spreading.

Vegetable and milk shipments from the areas near the plant
have been stopped, and Tokyo's 13 million residents were told
this week not to give tap water to babies after contamination
from rain put radiation at twice the safety level.

It dropped back to safe levels the next day, and the city
governor cheerily drank water in front of cameras at a water
purifying plant.

Despite government reassurances and appeals for people not
to panic, there has been a rush on bottled water and shelves in
many Tokyo shops remained empty of the product on Friday.

In the latest contamination finds, Kyodo reported that
radioactive caesium 1.8 times higher than the standard level was
found in a leafy vegetable grown at a Tokyo research
facility.

Experts say radiation leaking from the plant is still mainly
below levels of exposure from flights or dental and medical
x-rays.

Nevertheless, South Korea, Taiwan, Singapore, Australia, the
United States and Hong Kong are all restricting food and milk
imports from the zone. Other nations are screening Japanese
food, and German shipping companies are simply avoiding the
nation.

In Japan's north, more than a quarter of a million people
are in shelters. Exhausted rescuers are still sifting through
the wreckage of towns and villages, retrieving bodies and
pulling out photos for the consolation of survivors.

Authorities are burying unidentified bodies in mass graves,
despite Japan's usual Buddhist practice of cremation.

Amid the suffering, though, there was a sense that Japan was
turning the corner in its humanitarian crisis. Aid flowed to
refugees, and phone, electricity, postal and bank services began
returning to the north, albeit sometimes by makeshift means.

Owners of small businesses began cleaning up their premises
in the worst-hit areas.
   "Everybody on this block has the firm belief that they are
going to bring this thing back again," said Mario Kariya in the
town of Kamaishi, as he cleaned the family-owned Kariya Coffee
of debris.

The estimated $300 billion damage from the quake and tsunami
makes this the world's costliest natural disaster. Global
financial market jitters over Japan's crisis have calmed, though
supply disruptions are affecting the automobile and technology
sectors.

Foreigner investor buying of Japanese shares actually
reached a record high in the week after the disaster, data
showed, as bargain-hunters leaped in when stocks first plunged.

(Additional reporting by Linda Sieg, Chizu Nomiyama, Sumio Ito,
Mayumi Negishi, Shinichi Saoshiro and Kiyoshi Takenaka in Tokyo,
Yoko Nishikawa, Jon Herskovitz and Chisa Fujioka in northeast
Japan; Writing by Andrew Cawthorne and Raju Gopalakrishnan;
Editing by John Chalmers)