UPDATE 1-India scours jungle islands for lost Malaysian jetliner

* Largely uninhabited islands known for dense forest

* Operation 'like finding a needle in a haystack' (Adds fire on North Sentinel island)

By Sanjib Kumar Roy

PORT BLAIR, India, March 14 Indian aircraft on Friday combed Andaman and Nicobar, made up of more than 500 mostly uninhabited islands, for signs of a missing Malaysia Airlines jetliner that evidence suggests was last headed towards the heavily forested archipelago.

Popular with tourists and anthropologists alike, the islands form India's most isolated state. They are best known for dense rainforests, coral reefs and hunter-gatherer tribes who have long resisted contact with outsiders.

The search for lost Flight MH370 has expanded dramatically in the past week but failed to locate the plane or any wreckage, making it one of the most baffling mysteries in aviation history.

Initially focused northeast of Malaysia, search operations took a new turn after Malaysia's air force chief said military radar had spotted an unidentified aircraft, suspected to be the lost Boeing 777, to the west of Malaysia early on March 8.

On Thursday, two sources told Reuters the unidentified aircraft appeared to be following a commonly used navigational route that would take it over the Andaman and Nicobar islands.

The Indian Navy has deployed two Dornier planes to fly across the island chain, a total area of 720 km (447 miles) by 52 km (32 miles), Indian military spokesman Harmeet Singh said in the state capital, Port Blair. So far the planes, and a helicopter searching the coast, had found nothing.

"This operation is like finding a needle in a haystack," said Singh, who is the spokesman for joint air force, navy and army command in the islands.

The Defence Ministry said the Eastern Naval Command would also search across a new area measuring 15 km by 600 km along the Chennai coast in the Bay of Bengal.

The shape of this area, located 900 km west of Port Blair, suggested the search was focusing on a narrow flight corridor.

Chinese Foreign Ministry spokesman Hong Lei said China appreciated India's search efforts. Most of the passengers on Flight MH370 are Chinese.

A fire spotted on an island inhabited by the Sentinelese tribe was unconnected to the missing flight, Rear Admiral Sudhir Pillai, Chief of Staff of the joint command, told Reuters

"I can confirm we've been watching the smoke on the island by air and by boats along the coast for some time," Pillai said.

"But we believe it has nothing to do with the missing Malaysia Airlines plane," he added, saying that it was possible that the fire was lit by the tribe, who are known to burn thick grassland.

He added that he believed the smoke on North Sentinel island started before the aircraft disappeared seven days ago.

On standby is India's most advanced maritime air surveillance plane, the P-8I Poseidon, a long range anti-submarine variant of the U.S. Navy's P-8A. India, the first overseas customer for the aircraft, has ordered eight P-8Is.

Indian ships are also helping in the search by more than a dozen nations for the missing plane, by looking in an area north of Sumatra, in the south Andaman Sea.

The 2004 Asian tsunami devastated much of Andaman and Nicobar. In the wake of that disaster, a member of the reclusive Sentinelese was photographed shooting arrows at an Indian coastguard helicopter.

Another nomadic tribe, the Jarawa, are increasingly in contact with outsiders. Tribal rights group Survival accuses travel agencies of organising "human safari" tours to view the Jarawa, who are fish and turtle hunters and number about 400.

Andaman and Nicobar is of strategic importance for India, because of its location near the busy Malacca Straits shipping route. Over the past decade, India has built up its military presence on the islands. (Additional reporting by Nita Bhalla in PORT BLAIR and Sruthi Gottipati in NEW DELHI; Writing by Frank Jack Daniel; Editing by Mark Trevelyan)