(Updates with removal of blockade, end of protests)

By Mohammad Rafiq

SHINWAR, Afghanistan, May 10 (Reuters) - At least two people were killed and seven wounded in eastern Afghanistan on Saturday in clashes between police and demonstrators protesting against civilian deaths at the hands of foreign troops, witnesses said.

Several thousand protesters had blocked a highway through Nangarhar province linking the capital Kabul with Pakistan. They said they were demonstrating against the killing of three civilians in the area by foreign forces in an overnight raid.

"Two of the protestors have been killed, six more wounded and one policeman has also been hurt by a stone," said a witness named Mandozai, a retired army officer who was among the protesters.

The protesters said five civilians had also been detained in the raid, in the Shinwar district of Nangarhar. Both NATO-led and troops under U.S. command are stationed in the province.

An official for NATO in Kabul said he was not aware of the raid. The U.S. military said all those killed were militants and the target of its raid was "a foreign fighter network".

"During the operation, several militants were killed when they attacked coalition forces. Nine militants suspected of foreign fighter facilitation were detained," it said in a statement.

"Additionally, coalition forces discovered several AK-47s, a bolt action rifle, ammunition and grenades on the compounds. These items were destroyed to prevent use."

Protestors hurled stones at police, who responded by firing in the air and into the ground, a Reuters reporter at the scene said.

"We will start jihad if they (foreign troops) continue to carry on like this," Khairullah, a 35 year-old protestor chanted as others shouted "Allahu akbar", or God is greatest.

Civilian casualties are a sensitive issue for President Hamid Karzai's government and the foreign troops who back him.

More than 700 civilians have been killed during operations by foreign troops while hunting Taliban-led insurgents in Afghanistan in recent years, according to estimates of Afghan officials and foreign aid groups.

Ousted from power in 2001, the al Qaeda-backed Taliban militants are mostly active in southern and eastern areas near the border with Pakistan.

The past two years have been the bloodiest period since the Taliban's removal. More than 12,000 people, including more than 380 foreign soldiers, have been killed by violence since 2006.

The demonstrators ended the protest after the intervention of some top provincial officials and the highway reopened after being closed for several hours, residents said. (Writing by Sayed Salahuddin; Editing by Alex Richardson)

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