* President holed up in Quito hospital
* White House backs Correa
* Correa accuses opposition of seeking coup
* Police and some soldiers protest over benefits (Adds analyst, details)
By Hugh Bronstein and Alexandra Valencia
QUITO, Sept 30 (Reuters) - Renegade police attacked Ecuadorean President Rafael Correa in anti-austerity protests on Thursday and surrounded the hospital where he was treated as he accused his opponents of trying to topple him in a coup.
“I’ll leave here as president or they’ll take me out as a corpse,” he told a local television station from inside the police hospital.
Outside, some of Correa’s supporters hurled stones at the dissident police, who had launched the protests over a government proposal to cut their bonuses. They fired tear gas back at the president’s followers.
Correa and his wife were earlier attacked as he tried to speak to the protesters. A tear gas canister was thrown at them from a short distance and exploded near Correa’s face.
Trapped inside the hospital, where he was being treated, Correa said he was the target of a coup attempt and he would not negotiate with the police unless they ended their protest.
He also said there was a plan in place to end the standoff. “The operation to rescue the president has been ready for a while but I haven’t wanted to authorize it in order to avoid the loss of human lives.”
Ecuador, a South American OPEC member of some 14 million people, has a long history of political instability. Street protests toppled three presidents during economic turmoil in the decade before Correa took power.
The United Nations and governments across the Americas threw their support behind Correa, with the White House backing him and calling for a peaceful resolution to the crisis.
Crowds milled around the hospital as it began to get dark, many wearing masks to protect themselves from tear gas.
Correa’s top regional ally, Venezuelan President Hugo Chavez, said his friend’s life was in danger, and that police chiefs were making demands of him at the hospital.
“He told them that once he left he would be very happy to receive them, but that they had kidnapped him, and he would not give in to blackmail,” Chavez said on Venezuelan state TV, urging Ecuador’s military not to support the attempted “coup”.
Full coverage: [ID:nECUADOR]
Internal Security Minister Miguel Carvajal said two people were injured in the unrest in Quito, and that reports of a death in the second city of Guayaquil were being investigated.
There were reports of looting but no sign of ordinary Ecuadoreans joining the police protests, or using them as a spark for wider demonstrations against Correa’s rule.
“I still do not see a high risk of him being overthrown, but violence could escalate if Correa’s allies and the soldiers confront the police,” Alexandra Vela, analyst with Quito-based political think tank Cordes, told Reuters.
“I don’t see Correa falling because other public sector employees have not joined these police and military ... Correa still has significant popular support,” she said.
A U.S.-trained economist, Correa alienated foreign capital markets two years ago when his government defaulted on $3.2 billion in global bonds. Cash has been tight since as the nation relies on multilateral loans and bilateral lending to meet international financing needs.
Police angry over the proposed bonus cuts led the protests on Thursday, although some soldiers joined in. A group of troops seized the main international airport, halting flights.
Visibly furious, Correa had earlier challenged the protesting officers: “Kill me if you want to. Kill me if you have the courage.”
Several South American presidents joined were due to meet overnight in Argentina to discuss the events in Ecuador.
Witnesses said there was looting in Quito and in Guayaquil, and that many workers and school students had been sent home. A state TV channel said police had tried to cut their signal, and denounced what it called an attempt to silence free speech.
State oil company Petroecuador said operations were unaffected and troops had boosted security at its oil fields.
Correa is looking at the option of dissolving Congress, where members of his own left-wing party are blocking proposals aimed at cutting state costs.
Ecuador’s two-year-old constitution lets the president declare an impasse, dissolve Congress and rule by decree until a new presidential and parliamentary election. But that move would still need to be approved by the Constitutional Court.
The head of the armed forces, Ernesto Gonzalez, insisted the military was not rising up. “We are loyal to the maximum authority, which is the president,” he told reporters.
Central bank chief Diego Borja called for calm and urged Ecuadoreans not to withdraw money from banks. Peru and Colombia closed their borders with neighboring Ecuador.
More than half Ecuador’s 124-member Congress is officially allied with Correa, but he has blasted lawmakers from his Country Alliance party for not backing his budget proposals.
“The (government) finally realizes that maybe their current spending could not continue but they don’t really have a Plan B, nothing to cover shortfalls given the lack of investor friendly policies,” said Roberto Sanchez-Dahl, portfolio manager at Federated Investors in Pittsburgh.
Correa was first elected in 2006 promising a “citizens’ revolution” to increase state control of natural resources and fight what he calls Ecuador’s corrupt elite. [ID:nN30130945]
Correa is renegotiating contracts with oil companies in a bid to increase state revenue. Private firms working in Ecuador include Spain’s Repsol (REP.MC), Brazil’s Petrobras (PETR4.SA)(PBR.N) and Italy’s Eni (ENI.MI). (Additional reporting by Jose Llangari and Santiago Silva in Quito; Mario Naranjo and Alonso Soto in Santiago; Eyanir Chinea, Andrew Cawthorne and Daniel Wallis in Caracas; Daniel Bases in New York; Writing by Daniel Wallis and Andrew Cawthorne)