U.S. protesters call for strike against Oakland

* Organizers say they want to shut down city next week

* Police chief says department investigating incident

By Peter Henderson

OAKLAND, Oct 27 (Reuters) - An Iraq war veteran hospitalized after being badly wounded in clashes between anti-Wall Street protesters and Oakland police had his condition upgraded on Thursday as activists called for a general strike against the California city.

Former U.S. Marine Scott Olsen, 24, was upgraded from critical to fair condition overnight, a spokeswoman for Highland General Hospital in Oakland said.

Friends said Olsen was breathing on his own and could undergo surgery in the next day or so.

Occupy Oakland organizers said they had voted to stage the strike next week, intending to shut down the city following what a spokeswoman called the "brutal and vicious" treatment of protesters including former U.S. Marine Scott Olsen.

Olsen has become a rallying cry for the Occupy Wall Street movement nationwide.

"We mean nobody goes to work, nobody goes to school, we shut the city down," organizer Cat Brooks said. "The only thing they seem to care about is money and they don't understand that it's our money they need. We don't need them, they need us."

Spokeswomen for the city of Oakland and Mayor Jean Quan could not immediately be reached for comment.

Brooks said a general strike was a "natural progression" following a crackdown by authorities early on Tuesday morning in which protesters were evicted from a plaza near city hall and 85 people were arrested.

Protesters sought to retake that plaza on Tuesday night and were repeatedly driven back by police using stun grenades and tear gas. It was during one of those clashes that protesters say Olsen was struck in the head by a tear gas canister fired by police.

Acting Oakland Police Chief Howard Jordan told a news conference his department was investigating the incident.

BACK INTO THE STREETS

Olsen is believed to be the most seriously wounded person yet in confrontations between police and activists since Occupy Wall Street protests began last month in New York.

The protesters are angry at government bailouts of big banks, high unemployment, and economic inequality in the United States. Demonstrations have spread across the nation and overseas, although crowds remain relatively small in most cities.

Hundreds of demonstrators have been arrested in New York since the protests began. There have also been numerous arrests in other cities.

News of Olsen's injury ignited a furor among supporters of the protests. Activists in Oakland and elsewhere took to Twitter and other social media urging demonstrators back into the streets en masse.

More than 1,000 protesters moved onto the streets of Oakland again on Wednesday night as police largely kept their distance.

Friends say Olsen had been active in several anti-war veterans groups and had joined Oakland protesters in a gesture of solidarity after learning of the police crackdown there.

Keith Shannon, 24, who said he served with Olsen in Iraq, told Reuters his friend suffered a two-inch (5-cm) skull fracture and brain swelling.

Olsen served two tours in Iraq from 2006 to 2010 with the 3rd battalion, 4th Marine Regiment, Shannon said, adding that he and Olsen deployed together and were assigned to a tactical communications unit.