South Africa urges calm after Terre'blanche murder

VENTERSDORP, South Africa (Reuters) - South African President Jacob Zuma called for calm on Sunday after the killing of white far-right leader Eugene Terre'blanche in a suspected pay dispute with black workers fanned fears of racial strains.

Police detained two farm workers and said they were investigating the quarrel they had with Terre'blanche, but his Afrikaner Resistance Movement (AWB) says he was battered and hacked to death on Saturday in an attack with political overtones.

Zuma, who has made it a priority to court white Afrikaners, called it a "terrible deed" and urged South Africans "not to allow agent provocateurs to take advantage of this situation by inciting or fuelling racial hatred."

Terre'blanche, 69, was the voice of hardline opposition to the end of apartheid in the early 1990s although his party has since played a marginal role and does not have a big following among whites, who make up 10 percent of South Africans.

The AWB urged restraint while the funeral is prepared and before the party decides next steps. At Ventersdorp, in rolling farmland over 100 km (60 miles) west of Johannesburg, party followers in paramilitary khaki laid flowers at the gate of Terre'blanche's farm.

"We will decide upon the action we are going to take to avenge Mr Terre'blanche's death," said spokesman Andre Visagie.

Terre'blanche could be buried either on Thursday or Friday this week, Visagie said.

Concerns over increasing racial polarisation have been thrown into the open by a row over the singing of an apartheid-era song with the lyrics "Kill the Boer" by the youth leader of the ruling African National Congress.

The ANC has defended the song as no more than a way to remember a history of oppression, but it has worried minority groups and particularly white farmers, some 3,000 of whom have been killed since the end of apartheid.

STRAIN

"The killing of Terre'blanche will symbolically be seen as a strain on these relationships," said analyst Nic Borain of HSBC Securities. "But Terre'blanche is an old criminal and I don't think people would come to his defence or his killing (would) somehow invigorate white people's opposition to the new South Africa."

Terre'blanche's party did not hesitate to link the murder to the song. Terre'blanche had always described himself as a Boer. "That's what this is all about," Visagie said.

The ANC said the killing was a matter to be handled by the police rather than being a political issue and it should not be used to polarise the nation.

"We make this call to all South Africans to refrain from making speculative pronouncements on Terre'blanche's murder," Jackson Mthembu, ANC spokesman said.

Terre'blanche had lived in relative obscurity since his release from prison in 2004 after serving a jail sentence for beating a black man nearly to death.

The party -- whose flag resembles a Nazi swastika -- was revived two years ago. He was trying to build a united front among far-right parties to fight for a white homeland, but had gained little support.

Terre'blanche was a powerful orator in his Afrikaans language and was a distinctive, heavily built figure, with a thick grey beard and dressed in khaki. He often attended rallies on horseback during his fight to stop majority rule.

Police said the suspected killers were aged 16 and 21. Both had worked for Terre'blanche and are due to appear in court on Tuesday.

"It seems there was a dispute and these guys were arrested ... The police are investigating and the public will be kept abreast," Police Minister Nathi Mthethwa told a news conference. "Somebody is dead, can we keep it at that."

(Additional reporting by Tiisetso Motsoeneng in Johannesburg; Editing by David Stamp)

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