* Youth fatally shot in chest during unrest
* Pinera most unpopular leader since Pinochet dictatorship
* First fatality in months of social upheaval (Updates with new Pinera quote)
By Alexandra Ulmer and Antonio de la Jara
SANTIAGO, Aug 26 (Reuters) - A Chilean teenager died early on Friday after he was shot the previous day in huge protests in the capital against unpopular President Sebastian Pinera, the first death in months of social unrest.
Police identified the youth as 16-year-old Manuel Gutierrez and said he was shot in the chest as protesters battled authorities overnight in Santiago, in the aftermath of a 48-hour national strike against Pinera marked by violent clashes and sporadic looting.
Local media said the teenager’s brother blamed police for firing the shots during the incident in a modest neighborhood in the south of the capital. Police denied officers were to blame, saying they had not used firearms.
Conservative billionaire Pinera is the least popular Chilean leader since General Augusto Pinochet’s 1973-1990 dictatorship, according to a recent poll, weakening his mandate and hurting his chances of passing key reforms.
Led by students demanding free education, hundreds of thousands of people have taken to the streets in recent months to call for greater distribution of the income of a copper price boom in the world’s top producer of the metal.
“How many more deaths are we going to have to mourn?” Pinera said during a visit to southern Chile. “The time has come to act, to sit around a table together in peace, and not in a warlike atmosphere.”
“The time has come for unity, dialogue and agreements.”
On Thursday, youths blocked roads and fought pitched battles with police in full riot gear, who replied with tear gas and water cannon in Santiago and Chile’s other main cities.
While Latin America’s model economy is seen expanding 6.6 percent this year and is an investor magnet thanks to prudent fiscal and monetary policies, many ordinary Chileans feel they are not sharing in the economic miracle.
Investors, long used to economic stability, are weighing risk, although markets have taken the protests in stride.
Pinera is not likely to be ousted, despite the upheaval, but some see him as a lame duck less than halfway into his term.
Even a major Cabinet reshuffle last month, the second since Pinera took power in March 2010, has failed to quell unrest, and the youth’s death could stoke protest violence and raise the prospect of more Cabinet changes. [ID:nN1E76H180]
“The scenario is very unpredictable,” said Claudio Fuentes, director of social sciences at Universidad Diego Portales in Santiago. “There could be new ministerial changes,” he added, but he expected the government to hold off pending opinion polls.
The government said more than 1,300 people had been detained since Wednesday and several police officers were badly wounded — two of them shot — as violence flared when dozens of shops and supermarkets were looted and buses damaged.
Organizers said about 600,000 people joined Thursday’s protest across Chile. Reuters reporters estimated crowds in the capital alone at 200,000 people.
Operations at some of the world’s biggest copper mines were not affected by the protests, which also seek to pressure the government into raising wages and revamping the constitution and tax system.
The unrest has been a lightning rod for wider protests from environmentalists to copper miners in recent months.
Previous governments have faced one-day national strikes but it was the first 48-hour stoppage since Pinochet’s rule. (Writing by Simon Gardner; Editing by Peter Cooney)