* Teachers, Emanuel disagree on where negotiations stand
* Chicago's Democratic mayor has championed education reform
* Teacher performance evaluation is key issue
By Nick Carey
CHICAGO, Sept 11 (Reuters) - Chicago Mayor Rahm Emanuel and unionized teachers argued publicly on Tuesday over how to improve struggling inner-city schools as negotiations remained deadlocked on the second day of a strike that has closed the nation's third-largest school district.
The two sides could not even agree on how far apart they were in the bitter negotiations over a new contract for some 29,000 teachers and support staff.
Speaking at a school where children affected by the strike are being supervised and fed for half a day, Emanuel repeated that an agreement with the union was close. He reiterated that the school district believes the two issues in dispute are how to evaluate the performance of teachers and giving principals the authority to hire teachers.
The union disputed his description of the state of the talks and said the two sides were far apart.
"The Chicago Teachers Union has 49 Articles in its contract, to date, we have only signed off on six of them," union spokeswoman Stephanie Gadlin said in a statement issued as Emanuel spoke. "It is not accurate to say we are extremely close (to an agreement)."
With no sign of an early end to the strike, the patience of parents was tested as they juggled alternative child care arrangements and work.
Many parents stayed home from work with their children on the first day of a strike affecting some 350,000 children. Some who could afford it hired caregivers, while others used relatives or friends, or sent their children to centers around the city for temporary supervision.
"We're kind of winging it, to be honest," said Eve Ludwig, a parent outside one Chicago elementary school. "The kids stayed with their dad yesterday. Today they're with me. We're hopeful this will be resolved this week."
Chicago school officials said only about 18,000 students took part in a half-day of "safe and engaging programming" on Monday at 144 public schools, supervised by principals, volunteers and non-union employees.
Three more schools will be open for half-day care on Tuesday. About 52,000 students at publicly funded but non-union charter schools are attending classes as usual.
The face-off in President Barack Obama's home city is the biggest private or public sector labor dispute in the United States in a year. The stakes are high for both supporters and foes of a national movement for radical reform of urban schools.
The Chicago dispute immediately became an issue in the U.S. presidential campaign with Republican candidate Mitt Romney criticizing Obama for his support of unions.
"I choose to side with the parents and students depending on public schools," Romney said in a statement on Monday as he visited Chicago for campaign fundraising events.
Obama was careful not to get in the middle of the dispute between his former White House chief of staff, Emanuel, and a union that has supported Democrats with money and efforts to get out the vote in elections. White House spokesman Jay Carney said the president wanted the two sides to settle the matter quickly.
Since he became Chicago mayor in May 2011, Emanuel has championed education reform, successfully negotiating a longer school day for Chicago children.
The most contentious issue is teacher evaluations, which Emanuel insists should be tied to performance of students, and which is at the heart of the national debate on school reform.
Emanuel is proposing that Chicago teachers be evaluated based on a system that would rate teachers in several categories. Administrators would observe them in the classroom. Students would be asked about teacher strengths and weaknesses. And, most controversially, many teachers would be assessed based on their students' performance on standardized tests.
The union fiercely opposes the proposed evaluation system, arguing that many Chicago students perform poorly on standardized tests because they come to school hungry and live in poor and crime-ridden neighborhoods. They also say that class sizes are too large to teach children effectively.
The proposed evaluation system would take into account the social situation of students, according to the school district. But opponents of that approach say the methods of evaluation are "junk science."
Eric Wagner, a striking high school history teacher picketing with about 100 other teachers at Federico Garcia Lorca elementary school on Tuesday, said teachers stood united and firm "for a fair contract."
"It's amazing that Romney and (Republican vice presidential nominee Paul) Ryan have come out in support of Rahm Emanuel," he said, as passing cars honked horns in support of the picketing teachers. "Rahm has more in common with Mitt Romney than he has with the citizens of Chicago."
The union scheduled another rally in downtown Chicago on Tuesday, after police estimated that as many as 10,000 teachers and supporters poured into the streets on Monday afternoon to protest.
Chicago Public Schools are offering teachers an average 16 percent pay rise over four years and sweetened benefits such as paid maternity leave and picking up most of the costs of pensions, which critics say already gives the union too much.
The last teachers strike in Chicago, in 1987, lasted 19 days and there was concern that the labor fight could become as entrenched as the one in the neighboring state of Wisconsin. A new law there severely reducing public sector union power prompted an unsuccessful year-long campaign to recall Republican Governor Scott Walker.
"It is not going to turn into the situation that happened in Wisconsin. It is not likely to be that vicious," said Dick Simpson, a political science professor at the University of Illinois at Chicago.