* Ex-VP named as coup leader, no reaction from him
* Gunfire in capital for 2nd day, estimated death toll rises
* U.S. urges citizens to leave country, U.N. urges restraint
By Andrew Green and Louis Charbonneau
JUBA/UNITED NATIONS, Dec 17 (Reuters) - The United Nations received reports from local sources in South Sudan on Tuesday that between 400 and 500 people had been killed and up to 800 wounded in the latest violence, and the government said it had arrested 10 politicians in connection with a "foiled coup".
"Two hospitals have recorded between 400 and 500 dead and (up to) 800 wounded," a diplomat in New York said on condition of anonymity, citing an estimate United Nations peacekeeping chief Herve Ladsous gave during a closed-door briefing for the 15-member body.
Another diplomat confirmed Ladsous' remarks, adding that the United Nations was not in a position to verify the figures.
Earlier on Tuesday, a South Sudanese health ministry official told Reuters that at least 26 people were dead after fighting in Juba between rival groups of soldiers from Sunday night into Monday morning. Sporadic gunfire and blasts continued up to Tuesday evening.
The Juba government said it had arrested 10 major political figures and was hunting for its former vice president, accusing him of leading a failed coup in the oil-producing country's capital, where gunfire rang out for a second day.
The prominence of the names, including former finance minister Kosti Manibe among those who had been detained, underlined the size of the rift in Africa's newest state, less than 2-1/2 years after it seceded from Sudan.
The United States urged its citizens to leave the country immediately, and said it was suspending normal operations at its embassy.
U.S. Secretary of State John Kerry, on a visit to the typhoon-ravaged central Philippine city of Tacloban, urged a "peaceful and democratic" solution.
"The United States believes very strongly that all parties should refrain from any action that could further escalate the tensions," Kerry told reporters. "Political differences need to be resolved by peaceful and democratic means, those that have been hard fought for."
The White House said President Barack Obama was getting briefings on the situation.
President Salva Kiir, dressed in military fatigues, said on television on Monday that forces loyal to former vice president Riek Machar, whom he sacked in July, had attacked an army base in a bid to seize power.
South Sudan is one of the poorest and least developed countries in Africa despite its oil reserves, and it is plagued by ethnic fighting.
The rift at the heart of its political elite will dismay oil companies that had been counting on a period of relative stability after South Sudan's independence so they could step up exploration. France's Total and some largely Asian groups, among them China's CNPC, have interests there.
It will also be closely watched by South Sudan's neighbours, which include some of the continent's most promising economies, including Ethiopia and Kenya.
After its meeting on the crisis in New York, the U.N. Security Council issued a statement saying it "urged all parties to immediately cease hostilities, exercise restraint and refrain from violence and other actions that could exacerbate tensions."
French U.N. Ambassador Gerard Araud, president of the council this month, told reporters the council would meet again in coming days on the upsurge in violence in South Sudan.
THOUSANDS TAKE SHELTER
Kiir and Machar are from different ethnic groups that have clashed in the past. Machar leads a dissident faction inside the ruling Sudan People's Liberation Movement (SPLM) and was planning to run for the presidency.
Fighting erupted outside his compound in Juba on Tuesday, but his whereabouts were unknown, foreign affairs spokesman Mawien Makol Arik told Reuters. Machar has so far not released a statement.
The government on Tuesday accused him of being the "coup leader" and listed four other wanted men, including Pagan Amum, the SPLM's former Secretary General and the country's main negotiator in a prolonged oil dispute with Sudan.
"Those who are still at large will be apprehended," Information Minister Michael Makuei said in a statement on a government website. He said he believed they had fled to an area north of the capital.
The 10 officials had been arrested "in connection with the foiled coup attempt," the statement said.
Around 16,000 people had taken refuge in U.N. compounds in Juba by noon on Tuesday and the numbers were rising, the United Nations said.
Streets were empty at the start of a dawn-to-dusk curfew, ordered by the president. Mobile phone signals were down for a second day.
"Food and water are an issue for the population as they don't have fridges or city power so they buy food almost daily," said one aid worker in Juba, who asked not to be identified. "They haven't stocked up and are getting worried."
U.N. Secretary-General Ban Ki-moon spoke to Kiir on Tuesday and called for his government to provide an "offer of dialogue to its opponents and to resolve their respective differences peacefully".
The president, who comes from South Sudan's dominant Dinka ethnic group, sacked Machar, a Nuer, after mounting public frustration at the government's failure to deliver tangible improvements in public services and other basic demands.
The government played down suggestions that the conflict had an ethnic element, and said Kiir had met Nuer leaders to dispel the "misleading information" that they were being targeted.
Tensions have been building in the army, broadly along ethnic lines, independently of the Kiir-Machar rivalry, said analysts.
"The personalities involved are clearly important, but we think this is more fundamentally about the SPLA rather than necessarily being completely controlled by the SPLM political figures," said Cedric Barnes, Crisis Group project director for the Horn of Africa, based in Nairobi.
South Sudan is the size of France but has barely any paved roads. The government's critics complain it suffers the same ills as old Sudan - corruption, poor public services and repression by the state of opponents and the media.
Trending On Reuters
Ready for Rate Hike
Two years ago India was a "fragile five" economy growing at 5 percent, facing a severe current account deficit and the rupee at record lows as the U.S. Fed Reserve prepared to taper its stimulus programme. Today, two years into the term of RBI Governor Raghuram Rajan, India is set to confidently face the Fed's first rate rise since 2006. Full Article