UPDATE 2-Italy tells India handling of marines case could hurt EU ties
* Two Italian marines accused of killing Indian fishermen
* Attorney general says anti-terrorism law will be used
* Italy, EU express concern (Adds comment from EU)
ROME, Feb 10 (Reuters) - Italy said on Monday India's relations with the European Union would be seriously damaged if New Delhi uses anti-piracy and anti-terrorism legislation to try two Italian marines accused of killing two fishermen during a security operation in 2012.
The sharply worded warning from Prime Minister Enrico Letta came as authorities in India announced that the Supreme Court would hold a hearing next week on whether to charge marines Massimiliano Latorre and Salvatore Girone under the maritime security law.
"Italy is not a terrorist country," a statement from Letta's office said, adding that any decision to try the two under anti-piracy legislation would be "absolutely unacceptable".
"It would bring about negative consequences in relations with Italy and the European Union, with equally negative repercussions on the global fight against piracy."
The two marines, part of a military security team protecting the tanker Enrica Lexie from pirates, are accused of shooting the two fishermen after mistaking them for pirates off the southern Indian state of Kerala in February 2012.
On Monday, the EU added its voice to concern about use of the marine security law to try the two.
"The legislation that appears to be used suggests that somehow this is about terrorism. And this has enormous implications for Italy but also for all countries engaged in activities that are anti-piracy," EU foreign policy chief Catherine Ashton said.
"I do think [EU foreign ministers] colleagues need to now be very concerned."
The case has embittered relations between Italy and India, with Letta's government under growing pressure from opposition parties to act to bring home the men, who have been living in the Italian embassy in India for much of the past two years while the case against them has been prepared.
Latorre and Girone say they thought the fishermen were pirates and fired shots to warn them off approaching the ship but deny killing anyone.
India's attorney general said on Friday the two would be tried for the deaths of the fishermen under the anti-piracy and anti-terrorism law but that the death penalty available under that legislation would not be imposed.
The Indian supreme court is due to hold a hearing on Feb. 18 to decide whether to validate or reject the attorney general's request.
"This is a decision that would harm Italy's dignity as a sovereign state," the statement from Letta's office said.
The Italian government approached India's Supreme Court last month to request that the marines be allowed to return home, given that charges had yet to be filed two years after the incident. (Additional reporting by Suchitra Mohanty in New Delhi and Justyna Pawlak in Brussels; Editing by Robin Pomeroy)