* Sandy Hook Elementary to remain closed
* Funerals continue for young victims
* NRA breaks silence as gun control debate grows louder
By Edward Krudy and Peter Rudegeair
NEWTOWN, Conn., Dec 18 (Reuters) - Most students returned to school in the devastated Connecticut community of Newtown on Tuesday for the first time since a gunman's rampage killed 26 people in an elementary school, reviving the gun control debate in Washington.
Breaking its silence for the first time since the shootings, the powerful gun industry lobby, the National Rifle Association, said it was "shocked, saddened and heartbroken" and was "prepared to offer meaningful contributions" to prevent such massacres.
Businesses also reacted. One retailer, Dick's Sporting Goods < DKS.N>, pulled all guns from its store closest to Newtown and suspended the sale of certain semi-automatic rifles in its stores nationwide. A private equity firm said it would sell its investments in the company that makes the AR-15 type Bushmaster rifle used in the shootings after pressure from a major teachers' pension fund.
Sandy Hook Elementary, where Adam Lanza gunned down 20 6- and 7-year-olds and six adults on Friday, remained closed. It was a crime scene on Tuesday, with police coming and going past a line of 26 Christmas trees, one for each victim, decorated with ornaments, stuffed animals and balloons in the school colors of green and white.
The rest of Newtown's schools reopened with grief counselors and police present, while two families buried their children.
"It's going to be awful, doing the things we used to do," said Miguel, 16, who stopped by a doughnut shop on his way to Newtown High School. "There's going to be a lot of tears."
The massacre prompted some Republican lawmakers to open the door to a national debate about gun control, a small sign of easing in Washington's entrenched reluctance to seriously consider new federal restrictions.
The NRA uses political pressure against individual lawmakers and others to press for loosening constraints on gun sales and ownership across the United States while promoting hunting and gun sports.
The group, which said it had not commented until now out of respect for the families and to allow time for mourning and an investigation, planned a news conference on Friday.
NEWTOWN BURIES ITS CHILDREN
President Barack Obama called for action at a Sunday night prayer vigil in Newtown, and Democratic lawmakers have sought a new push for U.S. gun restrictions, including a ban on assault weapons such as the Bushmaster AR-15-style assault rifle used by Lanza.
The 20-year-old gunman carried hundreds of rounds of ammunition in extra clips and shot his victims repeatedly, one of them 11 times. He also shot and killed his mother before driving to the school, and then killed himself.
When Sandy Hook students go back to school, it will be at the unused Chalk Hill School in nearby Monroe, where a sign across the street read, "Welcome Sandy Hook Elementary!" There was no immediate word on when that would be.
Police have warned it could take months to wrap up the investigation, which was set back because Lanza smashed his computer's hard drive, preventing police from retrieving any data, The New York Times reported, citing a senior law enforcement official.
A day after the first two children were buried, funerals took place on Tuesday for James Mattioli and Jessica Rekos. Each was 6 years old. Funerals or remembrances were scheduled for six victims on Wednesday.
"I just feel its important to be here. I wanted to sit in the back and pay respect. I wanted to cry," said Angela Bergen, who drove 90 minutes from Elizabeth, New Jersey, with her 13-year-old son Jack to attend the Mattioli funeral.
At Newtown High School, three girls hugged each other in the parking lot before starting for the doorway. Counseling was available in the gym for students and staff.
Nanci Wallenta, taking her friend's son to middle school, said she was unworried about security and determined to get back to normal.
"It's an isolated incident," Wallenta said. "You can't go through life being afraid. You can't live in fear. ... We're a strong town."
ASSAULT WEAPONS BAN RECONSIDERED
White House spokesman Jay Carney said Obama would support U.S. Senator Dianne Feinstein's effort to craft legislation to reinstate an assault weapons ban that lapsed in 2004, and would also back any law to close a loophole related to gun-show sales.
"People have talked about high-capacity gun ammunition clips, for example, and that is something certainly that he would be interested in looking at," Carney added.
Obama spoke earlier in the day with Democratic Senator Joe Manchin of West Virginia, a gun rights advocate who said he would now be open to more regulation of military-style rifles.
Some Republicans have shown signs they too are willing to discuss gun control after Newtown.
"You are going to have some people (Republicans) who never, never go there," said Representative Steve LaTourette, an Ohio Republican. "But yes, I think most Republicans are willing to have a very, very serious conversation about what this means and taking a second look at what the Second Amendment means in the 21st century."
That amendment to the U.S. Constitution guarantees the right of Americans to bear arms.
In another sign of a possible shift on the issue, Michigan's Republican Governor Rick Snyder vetoed a bill that would have allowed some gun owners to bring concealed weapons into schools.
The U.S. Conference of Mayors sent an open letter to Obama urging him to act alone by exercising his executive power in addition to working with Congress.
U.S. private equity firm Cerberus Capital Management announced on Tuesday it was selling its investment in gunmaker Freedom Group after a major investor, the California State Teachers' Retirement System, said it was reviewing its investment with Cerberus.
CalSTRS, the second largest pension fund in the United States, had invested $751.4 million with Cerberus by the end of March 2012, according to its website. Cerberus bought firearms maker Bushmaster in 2006 and later merged it with other gun companies to create Freedom Group.
New York City joined the list of investors distancing themselves from the gun industry, with a spokesman saying the city's pension funds may sell nearly $18 million worth of stock in four companies that make guns and ammunition.
While Dick's pulled some guns from its shelves, Wal-Mart Stores Inc took down an informational website about semi-automatic Bushmaster rifles. Cabela's Inc continued to advertise AR-15-type Bushmaster rifles on its website, though it said the weapons were not available for sale online or at its Connecticut store.