(Adds Pinera reversal, curfew, protest reaction, spread to other cities)
By Aislinn Laing and Gabriela Donoso
SANTIAGO, Oct 19 (Reuters) - The Chilean military declared a night-time curfew in the capital on Saturday and President Sebastian Pinera announced he would freeze an unpopular public transport policy, as the government struggled to tackle widespread unrest in the streets over fare hikes.
The general in charge of security in Santiago under a state of emergency imposed at the weekend announced a curfew in the city and outlying areas between 10 p.m. on Saturday and 7 a.m. on Sunday.
As the curfew came into effect, crowds of thousands of people marched, gathered in public squares and came out of their homes to take part in traditional pot-banging protests, witnesses said.
Fires continued to burn and looters were seen in flashpoints around the city of six million people where earlier police and military clashed with protesters. There was also significant unrest in the port city of Valparaiso, seat of Chile´s Congress, where the government also declared military rule late on Saturday, and in the southern city of Concepcion.
“We invite all citizens to return to their homes and to evaluate the measures that the government has arranged and cooperate, to protect their family, their integrity and their own assets,” said General Javier Iturriaga del Campo, the military officer put in charge of establishing order in Santiago.
The decision to deploy the armed forces was met with widespread shock in a nation that lived under the military dictatorship of Augusto Pinochet between 1973-90.
Pinera, a center-right businessman, announced he would reverse public transport fare increases which had caused widespread protests after they were announced on October 6.
Chile is one of Latin America’s wealthiest nations but also among its most unequal. Frustrations over the high cost of living in Santiago have become a political flashpoint, prompting calls for reforms on everything from the country’s tax and labor codes to its pension system.
The president said in a national address broadcast from the presidential palace in Santiago that he had listened “with humility” to “the voice of my compatriots” and to discontent over the high cost of living and patchy public services.
He also announced a working group to address the concerns of protesters.
Popular ride-sharing applications including Uber sent messages to customers that they would not be able to operate during the curfew.
During the day, soldiers in armored personnel carriers reinforcing riot police using tear gas and water canons confronted demonstrators in fierce clashes in several squares, police confirmed. Shopping malls across the city were shut down, witnesses said, as military helicopters clattered overhead.
Burning barricades of tires and logs were set up along several main roads, and at least one supermarket was set on fire as well as motorway toll gates on the outskirts of the city.
Pinera met ministers and ruling coalition mayors for crisis talks on Saturday afternoon but opposition leaders stayed away, calling instead for the president to remove troops from the streets and reverse the public transport cost hike.
Government spokeswoman Cecilia Perez denounced “irresponsible, populist leaders” she said were advocating violence. She warned against a repeat in Chile of the protests and political violence seen in Ecuador and Venezuela in recent months.
“Today is not the time to seek political advantage,” she told reporters outside La Moneda presidential palace. “Let us be respectful, responsible and have faith in our armed forces.”
She defended Pinera, who was photographed in an upmarket Italian restaurant on Friday evening as police and demonstrators clashed and firefighters battled blazes in multiple metro stations and the high-rise downtown headquarters of power utility Enel.
The pictures were met with fury on social media by commentators who said they were emblematic of a president - a billionaire businessman who introduced credit cards to Chile - who was out of touch with ordinary Chileans.
“The president had been working since very early, concerned and busy with this,” she said.
Heraldo Munoz, the president of the opposition center-left Party for Democracy (PPD), called for the transport minister and others to step down and condemned the government for dismissing protesters as “criminals”.
“Let us also put a focus on the people who are protesting peacefully as you should see in a democracy,” he said. “These incidents of looting and attacks are isolated incidents. There are anarchistic groups that always infiltrate these peaceful protests. But the protests, marches, and some have been massive: these are people who want a change, that the abuses don´t continue and it´s those we should focus on.”
Prosecutors said 179 people involved in vandalism and attacks on police had been charged, 49 of them minors. Karla Rubilar, the regional governor of Santiago, said by Saturday afternoon five buses had also been burned. City authorities confirmed schools would be shut on Monday and Tuesday.
Several major supermarket chains, including Walmart’s local Lider stores, closed early, along with major shopping malls, after fliers circulated on social media calling for raids on upmarket areas of the city.
Sporting and cultural events have been canceled for the weekend, the metro network remains closed and foreign embassies have updated their security advisories for expatriates and visitors, urging them to avoid crowds and carry identification. (Reporting by Aislinn Laing Editing by Rosalba O’Brien and Alistair Bell)