* Anxiety spreads as Karachi bleeds
* Call for army intervention
* Threat to Pakistan's stability
* Torture chambers emerge
By Michael Georgy
KARACHI, Aug 28 (Reuters) - Imran Ali's kidnappers jabbed pistols into his sides and led him down a quiet street as fresh ethnic carnage spread fear in Pakistan's biggest city, Karachi.
Two other people blindfolded and held with the construction worker had just been shot at point-blank range. It was his turn.
Minutes later he was face down in a ditch filled with sewage, playing dead until the men were satisfied that three bullets had done the job and walked away.
"It feels like people are just being picked off in the streets because of their ethnic background. How can we live like this," Ali, a member of Karachi's Urdu-speaking community, said from a hospital bed.
"Apocalypse is coming to Karachi."
Pakistan's financial capital has a long history of ethnic violence between the dominant Muttahida Qaumi Movement (MQM) -- which represents the Mohajirs, descendants of Urdu-speakers who migrated from India after Pakistan's birth in 1947 -- and the ethnic-Pashtun Awami National Party (ANP).
Those parties are often accused of using ethnic gangs in a turf war over everything from land-grabbing schemes to extortion rackets to votes, allegations they deny.
But the worst bloodshed since the army was called in to ease street battles in the 1990s has created an unprecedented sense of doom and increased fears over instability in Pakistan, a strategic nuclear-armed U.S. ally.
"The political parties are giving their foot soldiers greater freedom. They seem to be doing whatever they want now," said a senior security official who refers to the violence as "ethnic cleansing."
The latest wave of violence came after the MQM pulled out of a national and provincial coalition with the ruling Pakistan People's Party (PPP). More than 400 people have been killed since July.
Torture chambers have emerged. Some people are drilled, burned, carved up and beheaded. Body parts are put in grain sacks and dumped in alleyways in a chilling new dimension to the strife, security officials say.
Some of the acts are filmed on mobile telephones and sent around to maximise the terror.
Security concerns by the United States and other Western allies in Pakistan have focused on al Qaeda and the Taliban.
Islamabad has come under even more pressure to tackle militancy since U.S. special forces discovered that al Qaeda leader Osama bin Laden had been living comfortably in Pakistan and then killed him in a secret raid.
The more complex conflict in Karachi could be far more destabilising in the long term, especially to the South Asian country's weak economy.
Karachi, home to ports, the stock exchange and central bank, contributes 25 percent of Pakistan's gross domestic product and is the country's main industrial base.
It is also a major transit point for supplies for U.S. forces in Afghanistan so upheaval here can hinder efforts to pacify the Taliban next door.
Coming up with a formula to tame Karachi won't be easy.
The ruling Pakistan People's Party often needs Karachi's political heavyweights as allies in the federal government. Cracking down too hard on them means losing political influence.
So the chaos is likely to go unchecked. As the politicians keep deploying more and more muscle on the streets and forging alliances with powerful policemen, already shaky law enforcement agencies will be undermined.
A police force of just 33,000 charged with protecting a population of about 18 million lacks the resources to rein in hardened criminals with plenty of machineguns, AK-47 assault rifles and rocket-propelled grenades. Authorities are only starting to install proper surveillance cameras.
"There are smaller and smaller gaps between cycles of violence now," Karachi police chief Saud Mirza told Reuters. "The police don't have time to catch their breath or gather intelligence on what's going on any more."
There are no signs reconciliation is possible. Political party leaders often get text messages saying "we will get you."
At the ANP headquarters in a Karachi villa, regional chairman Shahi Syed opens up what he says is a state intelligence file on illegal MQM activities.
"You see. This MQM member killed 100 people in 1992 and then he was recently set free. You see. Here is a list of their weapons," said Syed, a burly man who drives a black Mercedes with the licence plate ANP 001 and owns a Dubai car dealership.
"It has become a free-for-all."
Across town at the MQM complex protected by a guard with a machinegun and others who run mirrors under visitor cars to check for bombs, party officials point the finger at the ANP.
The MQM, which portrays itself as a secular champion of Pakistan's middle class working against feudalism, dominates Karachi.
Party leader Altaf Hussain, who lives in self-exile in London, fires up hundreds of thousands of supporters who faithfully gather for his video speeches.
Yet the MQM still feels threatened by the ANP because of the huge explosion of Pashtuns that have migrated to Karachi over the years from Pakistan's northwest.
Most of the killing takes place in poor areas on the edges of Karachi, where territory is clearly marked. "ANP" is written in huge letters on the steep rock cliff overlooking Orangi Town, one of the worst-hit places.
Down below, its worn-out red flags flutter from street poles running through the slum, where people live near piles of fetid garbage that attract mangy dogs and rats.
Authorities can barely offer basic services, let alone ease the ethnic hatred that has left bullet holes in the walls of stores and homes, and mental scars.
It's not just supporters of one political party or another that are gunned down. There is a growing belief that anyone can be hunted, simply because of their ethnic identity.
Kamran Muhammad, 23, was buying supplies for his family's sweets shop when he was abducted, had his hands and feet bound and beaten with clubs before being shot in the head and jaw.
He was neither a Mohajir, Pashtun or Baluch but his killers probably thought otherwise.
"We showed the young children of the family his bruises and the bullet holes. We want them to know how dangerous Karachi has become. That they must be careful," said his father, Muhammad Hanif, his eyes swelling with tears.
"From now on we will just kill whoever threatens us."
The murders have prompted business leaders, who lose millions of dollars every time Karachi's troubles bring the city to a standstill, and others to call for army intervention.
The spike in violence is raising the age-old question of whether Pakistan's civilian government, like the one ruling now, will ever be able to handle crises.
The military, seen as far more effective, has run the South Asian country for more than half of its history.
"Karachi's precarious situation is raising fresh doubts about whether Pakistan's civilian leaders will ever be able to manage the country," said Kamran Bokhari of STRATFOR global intelligence firm.
At Karachi's Jinnah Postgraduate Medical Centre, emergency department joint director Seemi Jamali is proud to say the institution does not turn away patients because of their ethnicity, as do other hospitals. But the latest ethnic bloodletting is draining the little optimism she has left.
"My nine-year-old son hides under the bed when he hears the shooting at night," said Jamali. "He calls me five or six times every time I go out and asks 'mommy are you safe?'"
In one of the wards, there was evidence of increasingly random carnage. One patient was sprayed with gunfire on a bus. Another in a nearby bed was wounded when men on