Wires

UPDATE 2-Biggest demonstrations yet rock protest-stricken Chile

* Transport protests worsen chaos in capital Santiago

Week of protests has led to deaths, arrests, destruction

* President Pinera seeking to placate demonstrators

* Chile unrest adds to wave of street protests round world (Adds quotes, details from protests)

By Dave Sherwood and Natalia A. Ramos Miranda

SANTIAGO, Oct 25 (Reuters) - As many as a million Chileans protested on Friday in the capital Santiago in the biggest demonstrations yet since violence broke out a week ago over entrenched inequality in the South American nation.

Demonstrators waving national flags, blowing whistles and horns, wafting incense and bearing placards urging political and social change streamed through the streets, walking for miles from around Santiago to converge on Plaza Italia.

The scenes were replicated in cities around the country.

Traffic already hobbled by truck and taxi drivers adding their own protest over road tolls ground to a standstill in Santiago as roads were closed and public transport shut down early ahead of marches that built throughout the afternoon.

Santiago governor Karla Rubilar said almost a million people marched in the capital - more than five percent of the country's population.

"Today is a historic day," Rubilar wrote on Twitter. "The Metropolitan Region is host to a peaceful march of almost one million people who represent a dream for a new Chile."

Clotilde Soto, a retired teacher aged 82, said she was marching because she did not want to die without seeing change. "Above all we need better salaries and better pensions, she said.

Protests that started over a hike in public transport fares boiled into riots, arson and looting that have killed at least 17 people, injured hundreds, brought more than 7,000 arrests and caused more than $1.4 billion of losses to Chilean businesses.

Chile's military has taken over security in Santiago, a city of 6 million people now under a state of emergency with night-time curfews.

On Friday morning, trucks, cars and taxis had slowed to a crawl on major roads, honking horns and waving Chilean flags. "No more tolls! Enough with the abuse!" read bright yellow-and-red signs plastered to the front of vehicles.

Chile's unrest is the latest in a flare-up of protests in South America and round the world - from Beirut to Barcelona - each with local triggers but also sharing underlying anger at social disparities and ruling elites.

Chile's two-term President Sebastian Pinera trounced the opposition in the most recent 2017 election, dealing the center-left ruling coalition its biggest loss since the end of Augusto Pinochet's dictatorship in 1990.

But now many protest placards and graffiti scrawled on buildings around the city call for his exit.

MULTICOLORED CROWD

As crowds of colorful demonstrators stretched along Santiago's thoroughfares as far as the eye could see, the noise of pots and pans being clanged with spoons, a clamor that has become the soundtrack for the popular uprising, was ear-splitting.

"The people, united, will never be defeated," the crowds chanted over the din.

By early evening there had been no signs of violence or clashes with the security forces, who maintained a significant but low-key presence inside paint-spattered and stone-dented armored vehicles parked in side streets.

Beatriz Demur, 42, a yoga teacher from the suburb of Barrio Brazil, joined a stream of demonstrators shuffling toward Plaza Italia with her daughter Tabatha, 22.

"We want Chile to be a better place," said Demur. "The most powerful have privatized everything. It's been that way for 30 years."

Eyeing the crowds packing the square, her daughter said: "I have waited for this a long time ... It's not scary, it's exciting. It means change."

Anali Parra, 26, a street hawker, was with her daughter Catalina, 9, and five-month-old son Gideon Jesus, his buggy decked in streamers and a flag of the indigenous Mapuche flag.

"This isn't going to go away," Parra said. "Pinera should just go now."

'URGENT' REFORMS

Many bus drivers in Santiago also staged a walk-off on Friday after one of their number was shot.

While much of wealthy east Santiago has remained calm under evening lockdown, the poorer side of the city has seen widespread vandalism and looting.

Pinera, a billionaire businessman, told the nation on Thursday he had heard the demands of Chileans "loud and clear."

He has sent lawmakers legislation to overturn a recent hike in electricity rates, and called for reforms to guarantee a minimum wage of $480 a month and introduce state medical insurance for catastrophes.

Seated with a group of elderly Chileans over lunch on Friday, Pinera put finishing touches on a bill to hike minimum pensions by 20%. "We must approve these projects with the urgency that Chileans demand," Pinera said.

An online poll conducted by local company Activa Research of 2,090 people between Oct. 22-23 found 83% of respondents said they supported the goals of the demonstrators, but 72.5% opposed violence as a method of protest.

The principal causes of the protests were low salaries, high utility prices, poor pensions and economic inequality, it said.

(Reporting by Dave Sherwood; Additional reporting by Natalia Ramos, Aislinn Laing and Fabian Cambero; Writing by Dave Sherwood; Editing by Andrew Cawthorne and Daniel Wallis)