Korea's Lee under pressure as fire kills protesters

SEOUL (Reuters) - Five South Koreans died on Tuesday in a blaze at a five-storey building during a standoff between police and residents protesting against demolition and demanding better compensation.

Four of the dead were believed to be among more than 40 tenants a Reuters witness earlier said were trapped inside the building, from which several protesters had been throwing Molotov cocktails before fire started in the early hours of the day.

District police chief Baek Dong-san said one police commando was among those found dead on the roof of the building, and one officer was missing. More than 20 protesters and police officers were injured.

"Policemen were firing water cannon onto the roof of the building where protesters were throwing down Molotov cocktails to resist a possible raid," the Reuters witness said at the site.

Another witness said: "The police were going at them as if they were out to kill them," referring to the protesters.

However, Baek said police had no choice but to move in because the protesters continued hurling Molotov cocktails, bricks and golf balls and spraying acid at officers and passers-by.

Dozens of tenants in the largely commercial Yongsan area, slated for major redevelopment, have been battling with police since early Monday as they demand better compensation.

The tragic ending to the all-night sit-in could put President Lee Myung-bak on the defensive a day after he reshuffled the cabinet's economic portfolio to speed up work to pull Asia's fourth largest economy out of a recession.

The fire also came two days after the unpopular Lee replaced his police chief, widely criticised for being too hard on anti-government protesters.

Lee has struggled to put behind him months-long street protests last year against his decision to open the country to U.S. beef imports, as he seeks to move promised economic and financial reforms through a politically deadlocked parliament.

Lee, who has faced mounting criticism for the government's handling of the impact of the global economic meltdown, made sweeping changes Monday to his roster of top finance officials.

(Additional reporting by Yoo Choonsik; Editing by Nick Macfie and Jerry Norton)