New clashes in Chile as two die in protest violence

Fresh clashes broke out in Chile's capital Santiago on Sunday after two people died when a supermarket was torched overnight as violent protests sparked by anger over economic conditions and social inequality raged into a third day.

Police and the military fired tear gas and used water cannons against protesters.

Nearly 10,000 soldiers have been deployed while an overnight curfew was imposed on Santiago and a state of emergency called in five regions.

Interior and Security Minister Andres Chadwick said two women burned to death in the blaze at a store owned by US retail chain Walmart in the early hours of Sunday.

The third victim, who authorities initially had said had died in hospital, suffered burns on 75 per cent of her body.

The deaths were the first in the worst unrest since Chile returned to democracy in 1990, following the dictatorship of General Augusto Pinochet.

Chadwick said two people suffered gunshot wounds following a clash with police who responded to a report of looting in a town south of Santiago.

Authorities reported 103 serious incidents throughout the country with 716 people detained.

It is the first time in the post-Pinochet era that troops have been deployed in what has otherwise been one of Latin America's most stable countries.

Protesters set fire to buses, smashed up metro stations, knocked down traffic lights, ransacked shops and clashed with riot police in Santiago and other cities.

Almost all public transport in the capital of seven million people was paralyzed on Sunday even after the curfew ended at 7:00 am, with shops shuttered and many flights in and out of Santiago's international airport cancelled.

Louis de Grange, president of the state Metro S.A. company, told Canal 13 the "brutal destruction" of Santiago's metro service had caused more than USD 300 million in damage.

The violence comes just a month before some of the world's most influential leaders, including US President Donald Trump and China's Xi Jinping, are due in Santiago to discuss trade at the Asia-Pacific Economic Cooperation summit.

What started earlier in the week as a protest against a hike in metro fares, escalated dramatically on Friday as demonstrators expressed anger over social inequality and the government's liberal economic system.

On Saturday, Chile President Sebastian Pinera announced he was suspending the fare increase, a day after declaring a two-week state of emergency.

Pinera acknowledged that those in the streets had "good reasons" to protest but called on them "to demonstrate peacefully."