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UPDATE 8-Ecuador's Correa attacked, says opponents plot coup

 * Correa holed up in Quito hospital
 * White House backs Correa
 * Correa accuses opposition of seeking coup
 * Police and some soldiers protest over benefits
 (Adds White House reaction, 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 opponents of trying to topple him in a coup.
 Some of Correa's supporters hurled stones at police around
the building and the officers, who launched the protests over a
government proposal to cut their bonuses, fired tear gas back.
 Correa said it was coup attempt planned by his opponents,
and leaders across the Americas threw their support behind him.
The White House said it backed Correa and urged a peaceful
resolution to the crisis.
 Venezuela's President Hugo Chavez, the main regional ally
of the leftist Correa, said his friend told him by phone that
police chiefs were making demands of him at the hospital.
 "He told them that once he had 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.
 Correa's life was in danger, Chavez added, and he urged the
Ecuadorean military not to support the attempted "coup".
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 Full coverage:                             [ID:nECUADOR]
 Insider TV:               link.reuters.com/mar36p
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 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.
 Correa, a U.S.-trained economist, 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.
 The clashes outside the hospital followed a chaotic morning
in which Correa and his wife were attacked, troops took over
the main international airport, and protesting police burned
tires in demonstrations against planned cuts to their bonuses.
 Correa said he and his wife were jostled and stunned by an
exploding tear gas canister as he tried to speak to
demonstrators. Witnesses and local media said Correa was also
hit by a flying object in the melee.
 Visibly furious, he confronted the officers demonstrating
against the planned budget cuts and challenged them: "Kill me
if you want to. Kill me if you have the courage."
 LOOTING
 Foreign Minister Ricardo Patino called on a large crowd
gathered outside the presidential palace, telling them people
were trying to attack the president in the hospital and that
they should march with him to save their trapped leader.
 "The president is being held hostage inside," shouted
Fernando Jaramillo, 54, a Correa supporter at the hospital.
 Witnesses said there was looting in Quito and in Guayaquil
city, and that many workers and school students were sent
home.
 State oil company Petroecuador said operations were
unaffected and troops had boosted security at its oil fields.
 Messages of support for Correa flowed in from abroad, with
the Organization of American States and the governments of
France, Venezuela, Chile, Argentina and others backing his
government.
 Chavez said he was about to fly to Argentina for an
emergency meeting of regional body UNASUR to discuss the
events. Peru's and Colombia's leaders said they were also
going.
 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. That move would
still need to be approved by the Constitutional Court.
 POLICE BLOCK ROADS
 Police apparently led the protests on Thursday but some
soldiers joined in solidarity. "We are demanding that the
president revoke the military service law," one soldier at the
airport told Reuters, asking not to be named.
 Armed forces' head Ernesto Gonzalez said troops were 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, meanwhile, closed their borders with
neighboring Ecuador.
 More than half Ecuador's 124-member Congress is officially
allied with Correa, but the president 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" aimed at increasing state control of natural
resources and fighting what he calls the country'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.SAPBR.N and Italy's Eni ENI.MI.
 (Additional reporting by Jose Llangari and Santiago Silva in
Quito; Mario Naranjo in Santiago; Eyanir Chinea, Andrew
Cawthorne and Daniel Wallis in Caracas; Daniel Bases in New
York; Writing by Daniel Wallis and Andrew Cawthorne, Editing by
Kieran Murray and Sandra Maler)


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