WRAPUP 5-Militants attack Pakistani hotel, 5 dead, 70 hurt

* Attack on hotel in Peshawar

* Five dead including U.N. worker; 70 wounded

* Army helicopters assist militia

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By Alamgir Bitani

PESHAWAR, Pakistan, June 9 (Reuters) - Militants attacked a hotel popular with foreigners in the Pakistani city of Peshawar with guns and a truck bomb on Tuesday, killing five people including a U.N. worker, authorities said.

Taliban militants have stepped up bomb attacks since the military launched an offensive in April in the former tourist valley of Swat and neighbouring districts northwest of the capital.

Militants shot their way through a security post at the gate of the Pearl Continental Hotel in the northwestern city of Peshawar and a suspected suicide bomber set off the truck-bomb in front of the lobby, security officials said.

"I was in the Chinese restaurant when we heard firing and then a blast. It was totally dark and people started shouting and running," hotel waiter Ali Khan told Reuters.

Top city administrator Sahibzada Anis said five people had been killed, among them a U.N. refugee agency worker. Police said the man was Serbian.

About 70 people were wounded among them a German woman working for the U.N. children's fund. A British man and a Nigerian man were also wounded, Anis said.

The United Nations is heavily involved in providing relief for more than 2.5 million people displaced by the fighting in Swat and elsewhere in the northwest.

About a dozen U.N. staff were staying at the hotel and some had been wounded but there had been no report of any fatality, a U.N. official said.

The hotel's windows were shattered and dozens of cars were destroyed. Police said the bomb contained 500 kg (1,100 lb) of explosives, a similar size to a suicide truck bomb at the Marriott Hotel in Islamabad in September that killed 55 people.

There was no claim of responsibility for the latest attack but the Taliban have warned of retaliatory action over the offensive in Swat.

The United States, which needs sustained Pakistani action to help defeat al Qaeda and cut off militant support for the Afghan Taliban, has been heartened by the resolve the government and military are showing in the Swat offensive.

PUBLIC SUPPORT

Washington has been alarmed by the possibility of nuclear-armed Pakistan drifting into chaos.

U.S. Director of National Intelligence Dennis Blair said on Monday Pakistan's army was gaining in the offensive because public support for the operation was solidifying.

"For the first time, the Pakistan army operations in that part of the world have support of the government and the public. This is really different from the past, when the army went up and there was little backing," Blair told intelligence officials in Washington.

Earlier on Tuesday, the army came to the help of a pro-government militia fighting the Taliban in a northwestern district after outrage over a suspected Taliban bomb attack at a mosque last week that killed about 40 people.

The villagers' action is the latest in a series of examples of people turning on the Taliban in recent weeks, underscoring the shift in public opinion away from the Islamists.

Army helicopters had attacked militants surrounded by militia fighters in a village in the Upper Dir district, senior police officer Rahim Gul told Reuters by telephone.

Gul said more people were joining the militia and it was making advances after heavy clashes. Paramilitary soldiers set up mortars on high ground above the village. About 25 militants were killed in the fighting, police and the military said.

The military says troops have cleared most of Swat though soldiers are encountering pockets of resistance. The army said on Tuesday afternoon 14 militants and one soldier had been killed in the previous 24 hours.

In all, the army says more than 1,300 militants and 105 soldiers have been killed. There has been no independent confirmation of the figures.

U.S. envoy to Afghanistan and Pakistan Richard Holbrooke also said on Monday that Pakistani public opinion was increasingly on the government's side, and he renewed calls for other Western countries to provide more aid for the displaced.

The United States has pledged more than $300 million for the crisis, compared with less than $200 million from the rest of the world, he said. The government risks seeing public support evaporate if the displaced are not looked after. (Additional reporting by Kamran Haider, Faris Ali, Aizaz Mohmand; Writing by Robert Birsel; Editing by Charles Dick)