* Police say 42 killed in anti-foreigner violence

* Government calls in army to help stop attacks

* Six immigrants wounded in Durban (Updates death toll)

By Gordon Bell

JOHANNESBURG, May 21 (Reuters) - South Africa's President Thabo Mbeki gave approval on Wednesday for the army to help end attacks on foreigners that have killed more than 40 people.

The attacks on African immigrants, accused by many poor South Africans of taking scarce jobs and fuelling crime, have forced thousands of people from their homes, unnerved investors and hit the rand currency.

"President Thabo Mbeki has approved a request from the South African Police Service for the involvement of the South African National Defence Force in stopping on-going attacks on foreign nationals," a statement from the presidency said.

Police spokeswoman Sally de Beer said this would involve equipment and troops being deployed into affected townships.

"It will be in terms of equipment and personnel. They won't be taking over the role of the police, they will be acting in support of us in specific operations," she said.

Local media in the eastern KwaZulu-Natal province said at least six immigrants were wounded in an overnight attack on a Nigerian-owned tavern in the port city of Durban.

Police said the death toll since the violence started on May 11 had risen to 42 by late on Wednesday. A further 16,000 people had been driven from their homes and 400 arrested.

Police and provincial officials said the Durban attack was not sparked by xenophobia, but it increased fears the violence could spread from the Johannesburg area where it first erupted.

The Zulu-based Inkatha Freedom Party, the ruling ANC's main rival in KwaZulu-Natal, said anti-foreigner violence clearly had spread to the province -- home to South Africa's biggest ethnic group, the Zulus.

"We are ... saddened by reports that such barbaric acts have spread to our province and Durban in particular," it said.

ARRESTS

Government officials raised the possibility the attacks on foreigners were not spontaneous but organised, possibly for political reasons. Four community leaders were arrested in the Johannesburg area on Wednesday.

The United Nations' International Organisation for Migration said on Tuesday that the violence had displaced 13,000 people.

South Africa's currency fell sharply on Tuesday, largely due to the violence. The rand was slightly firmer on Wednesday at about 7.65 to the U.S. dollar.

Flashpoints around Johannesburg were calmer on Wednesday. Police armoured vehicles patrolled areas east of Johannesburg and thick clouds of smoke hung over many squatter settlements.

But many African immigrants were taking no chances.

"We must leave, It is not safe here," said a Zimbabwean woman who only gave her name as Amelia.

In Primrose, where immigrants had been forced out of shacks in squatter settlements, scores of South Africans carted scrap metal from destroyed shanties on wheelbarrows and shopping carts to sell to scrap metal dealers.

"We are going to get their jobs. They (immigrants) work for too little and South Africans must make money," said Nomsa Nini, who received 50 rand ($6.52) for a barrow of scrap metal.

Government officials fear the crisis could damage the lucrative tourism industry and cripple the nation's bid to host the 2010 soccer World Cup.

The violence has also increased political instability at a time of power shortages, rising inflation and disaffection among the poor over Mbeki's pro-business policies.

South Africa, with a population of about 50 million, is home to an estimated 5 million immigrants. The biggest group -- an estimated 3 million -- are from Zimbabwe. They have fled economic collapse at home and the violent political standoff since disputed March 29 elections. (Additional reporting by Paul Simao in Boksburg, Marius Bosch, Gugulakhe Lourie and Phakamisa Ndzamela in Johannesburg; editing by Matthew Tostevin) (For full Reuters Africa coverage and to have your say on the violence and other top issues, visit: http://africa.reuters.com)

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