By Alain Iloniaina
ANTANANARIVO (Reuters) - Security forces killed up to 25 people in Madagascar on Saturday when they opened fire on an anti-government protest outside the presidential palace, a senior police officer at the scene said.
Two weeks of civil unrest stoked by a power struggle between President Marc Ravalomanana and the sacked mayor of the capital, Andry Rajoelina, have killed some 125 people and worried multinational firms investing in the giant Indian Ocean island.
One senior police officer, who asked not to be named, told Reuters that up to 25 people were killed when security forces opened fire on an opposition rally in Antananarivo. Shots rang out in the background and sirens wailed.
Doctors said about 180 people arrived at the city's main Ravoahangy Andrianavalona hospital. Many were bloodied and some lay groaning on stretchers in the corridors.
"The crowd was walking peacefully, then all of a sudden the military opened fire," Jocelyn Ratolojanahary told Reuters at the hospital, nursing a heavily bandaged hand. She said she saw several bodies lying back at the palace.
Rajoelina accused the government of murdering civilians.
"The people were not armed, they only had their courage," he said on his private Viva Radio after the shootings. "The popular resistance will continue. The protests will not stop here."
Ravalomanana blamed the opposition leader for the violence and said what had happened was "scandalous and intolerable."
"He (Rajoelina) led people to take the presidential palace by force and didn't know how to control them," Ravalomanana told state television. "This is not the way Madagascar will develop."
"ECONOMIC CATASTROPHE
The opposition accuses the president of being a dictator.
Ravalomanana, who has galvanised the world's fourth largest island's reputation as a safe haven for tourists, denies it and has called for dialogue to end the bloodshed.
A week ago, Rajoelina, 34, declared he had taken power. At an earlier rally on Saturday, the fiery former mayor -- who has led a series of opposition strikes and protests -- named a prime minister to head an interim government.
Ravalomanana says he is still in charge and he sacked Rajoelina on Tuesday. Leaders from the continent meeting at an African Union summit in Ethiopia this week condemned the attempts to oust the 59-year-old self-made millionaire.
Madagascar has opened its doors to foreign firms which are exploring for oil, gold, cobalt, nickel and uranium. Big investors include Rio Tinto and Sherritt International.
Speaking to Reuters late on Friday before the latest violence, the U.S. Ambassador to Madagascar, Niels Marquardt, said the turmoil had been disastrous for the country.
"The economy is in a catastrophic situation," he said. "There are hardly any tourists in Madagascar right now. Textile orders are falling every day, contracts are being revoked."
Business was shifting to Kenya and Bangladesh, he said.
Analysts say Rajoelina, nicknamed TGV after the French express train, has successfully tapped into widespread public frustration with the government. But they say he may have over-played his hand in trying to overthrow the president.
On Saturday, U.N. Secretary-General Ban Ki-moon's special envoy to Madagascar, Haile Menkerios, arrived in Antananarivo for a four-day mediation visit. The Eritrean diplomat told a news conference that his team would meet all concerned parties.
(Additional reporting by Fanja Saholiarisoa in Antananarivo and Richard Lough in Port Louis; Writing by Daniel Wallis; Editing by Angus MacSwan)
