Antananarivo  - Madagascan troops opened fire Saturday on an anti-government demonstration in the capital, killing 40 protestors and injuring 300 in a bloodbath escalation of political tensions on the tropical island, local media reports said.

Among the dead were reportedly two TV journalists, including a foreign correspondent - but there was no immediate official confirmation of the death toll.

Authorities issued an appeal for blood donations as the capital Antananarivo's hospitals filled up with wounded victims, while desperate scenes took place on the streets as people searched frantically for their relatives.

Doctors and medical students were ordered to report for duty in the hospitals.

The Red Cross set up a tent on the site to help provide initial first aid treatment to the victims.

The violence broke out as some 25,000 people had attended a demonstration in support of Antananarivo ex-mayor Andry Rajoelina, who had declared himself as president and introduced his counter- government to the crowd.

Some 10,000 demonstrators then marched towards the city palace which serves as one of the offices of President Marc Ravalomanana, continued until darkness set in.

Special army unit soldiers blocked their path, and after some initial peaceful talks between the two sides, some demonstrators suddenly surged forwards, with soldiers opening fire with automatic weapons.

Eyewitnesses said at least 20 people were killed in the first salvo of gunfire. A second salvo triggered a panic among the crowd, including a number of children.

Later on television, Ravalomanana and Rajoelina traded accusations over the bloodshed. Ravalomanana expressed his condolences to the victims and accused Rajoelina of having incited his followers to their doom.

Rajoelina called the president a failure and said only dictators would let soldiers fire on unarmed people without any warning.

The bloodshed was the latest escalation in the violence over the past two weeks, with the power struggle having previously claimed more than 100 lives.

The United Nations is now aiming to try to mediate in the power struggle, with special UN envoy Maile Menkerios expected to arrive on the island Saturday, although a regional cyclone has disrupted some international flights. (dpa)