(Add quotes from health official, details)

By Mita Valina Liem

JAKARTA, Aug 13 (Reuters) - An Indonesian woman has died of bird flu in Bali, the first confirmed human death from the virus on the resort island hugely popular with foreign tourists.

A health ministry official said on Monday the 29-year-old woman came from west Bali. She died on Sunday in hospital after suffering from high fever.

Her 5-year-old daughter also died recently after playing with chickens but it was unclear if the girl died of bird flu.

Joko Suyono of the ministry's bird flu centre said a 2-year-old girl living close by had also developed bird flu symptoms, but was recovering in hospital. Test results had not yet come back.

News of the woman's death will be a blow to Bali, which is the centre of Indonesia's tourism industry and has been trying to shake off the impact of several deadly bomb attacks by Islamic militants in recent years.

Bayu Krisnamurthi, head of the national bird flu commission, said measures to contain the outbreak had been put in place, including culling and testing of humans and animals in the area.

"We are working very hard to prevent the spread of the virus to nearby villages," Krisnamurthi told a news conference, adding that there were weaknesses in the island's current surveillance and response system.

Ngurah Mahardhika, a scientist on an expert panel of the country's bird flu commission, told reporters the virus had been endemic in Bali's poultry population since 2003.

"It was a matter of time before the first human cases would appear," he said on the sidelines of the news conference.

BURIED CHICKEN CARCASSES

The woman, from a village in the district of Jembrana, 105 km (65 miles) from the Balinese capital Denpasar, was suffering from a high fever before dying of multiple organ failure, said Ken Wirasandi, a doctor at the Sanglah hospital in Denpasar.

Suyono said there had been sick chickens around the woman's house and many had died suddenly in recent weeks.

"The villagers didn't burn the carcasses. Instead they buried them or fed them to pigs," Suyono added.

Contact with sick fowl is the most common way for humans to contract the H5N1 virus.

The woman had started showing symptoms more than a week ago, but was only admitted to hospital six days later.

She was transferred to a bigger hospital in Denpasar on Friday, where she was treated in the isolation unit, Suyono said.

He said initial investigations indicated the daughter had become sick after playing with chickens and died a week later.

"We were unable to retrieve any tissue samples, so we can't confirm whether she died of bird flu," Suyono added.

Bird flu is endemic in bird populations in most parts of Indonesia. In Bali, as in the rest of the country, millions of backyard chickens live in close proximity to people.

Experts fear if the virus develops the ability to pass easily between humans, millions might die in a pandemic.

Indonesia has had 82 confirmed human deaths from bird flu, the highest for any country in the world.

Excluding the latest death, there have been 319 confirmed human cases and 192 deaths globally, according to World Health Organisation data.

Bali, a predominantly Hindu island in mostly Muslim Indonesia, is starting to recover after suicide bombers killed 20 people in October 2005. The attacks came after more than 200 died in nightclub bombings in late 2002.

The island regularly hosts large international conventions and is due to hold an important U.N. climate change conference in December which about 10,000 people are expected to attend.

According to government data, tourist arrivals in Bali rose 34 percent to 781,059 in the first half of 2007 from a year ago. (Additional Reporting by Adhityani Arga)

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