By Ange Aboa
ABIDJAN (Reuters) - Clashes in Ivory Coast killed at least five people on Tuesday in the latest outburst of violence between backers of presidential claimant Alassane Ouattara and forces loyal to incumbent Laurent Gbagbo.
The world's biggest cocoa grower has been in turmoil since a November presidential election that both men claim to have won. The standoff has threatened to rekindle a 2002-2003 civil war.
Gbagbo's office has sought to allay investor concerns, promising on Tuesday to make good on delayed interest payments on its 1.4 billion pound bond. But a top aid fund said separately that it was freezing disbursements because of the instability.
Witnesses said street clashes broke out early on Tuesday and continued for hours -- marking some of the worst violence in the main city since mid-December.
A Reuters reporter saw the bodies of two protesters and three police lying in the street with gunshot wounds in the predominantly pro-Ouattara neighbourhood of Abobo.
Hundreds of police and military patrolled the area with armoured vehicles and automatic weapons.
"There was shooting all over the place for hours," said student Ouattara Idrissa, 20, an Abobo resident. "We hid in our houses and only now are we safe to come out."
Amed Coulibaly, 32, a trader, told Reuters he saw seven bodies: four protesters and three police.
"It all started when military vehicles raided the neighbourhood. They killed the Ouattara activists," he said.
Protests in Ivory Coast, whether pro-Gbagbo or by his enemies, are sometimes infiltrated by gunmen.
The clashes come as world powers and African states heap pressure on Gbagbo to cede the presidency to Ouattara after provisional results from the November 28 poll showed Ouattara won with an eight percentage-point margin.
West African bloc ECOWAS has threatened Gbagbo with force if he does not leave power. The United States and the European Union have imposed travel bans on him and his inner circle.
But Gbagbo, who points to a Constitutional Council ruling that the results were rigged against him, has has shown no sign of caving to the pressure and retains the loyalty of the army.
TENSIONS MOUNT
The turmoil has cast doubt over Ivory Coast's ability to make coupon payments on its 2032 Eurobond, which has seen its yield rise from around 10 percent to as much as 16 percent as the dispute has deepened.
Investor concerns grew further after a 19 million pounds interest pay-out to investors was missed in late December, but the price of the bond rose on Tuesday as Gbagbo's finance ministry pledged to honour the payment before the end of a 30-day grace period.
Volumes of cocoa reaching Ivory Coast's ports for shipment are about 2.5 percent below a year ago, according to official figures obtained by Reuters on Tuesday, though exporters have said volumes could rebound quickly during calm spells.
Violence has killed more than 200 people since the poll, and fears of further conflict have led more than 20,000 people to flee into neighbouring Liberia, according to U.N. figures.
Bloody protests and a brief gun battle between pro-Ouattara and pro-Gbagbo forces erupted last month, but there have been few civil disturbances in the main city since.
Ouattara's supporters say they are terrified of being killed by security forces and allied militias.
The election was meant to reunite the former "pearl of West Africa" after a 2002-03 civil war, but has instead deepened divisions and raised the spectre of a return to open conflict.
Ethnic clashes in Ivory Coast's western town of Duekoue last week killed 33 people and wounded 75, the main hospital said.
In a new setback, aid network Global Fund to fight AIDS, Tuberculosis and Malaria said it was freezing disbursement of grants to Ivory Coast and taking measures to safeguard its stocks and funds due to the instability,
The Geneva-based fund has a 163 million euro (135 million pound) programme against the three epidemics in Ivory Coast, according to Taveau. Malaria is the largest operation, accounting for 109 million (90.5 million pounds).
The World Bank and the West African regional central bank have moved to cut Gbagbo's funds, but it is not clear to what extent he still benefits from proceeds from the cocoa and oil sector.
(Writing by Richard Valdmanis and Tim Cocks; additional reporting by Tim Cocks in Abidjan, Sujata Rao and Carolyn Cohn in London, and Stephanie Nebehay in Geneva; Editing by Maria Golovnina)
