(Recasts, updates toll, adds U.N. envoy)

By Gopal Sharma

KATHMANDU, March 22 (Reuters) - Police scoured sugarcane farms in southeast Nepal on Thursday for bodies after bloody clashes between Maoists and an ethnic group left at least 27 people dead, officials said.

The clashes on Wednesday between former Maoist rebels and the Madhesi People's Rights Forum in the border town of Gaur, 80 km (50 miles) south of Kathmandu, were the deadliest this year.

The two sides attacked each other with guns and bamboo sticks after a row caused when they selected the same venue for public meetings, officials said.

"We picked up bodies from sugarcane farms and wheat fields where they were lying in pools of blood," Kuber Kadayat, a police official, told Reuters by phone from Gaur.

"About a dozen bodies were recovered from a spot. They had their heads broken after being hit," Kadayat said. "It was terrible."

Officials said Gaur and the neighbouring town of Kalaiya were quiet after day-long curfews ended.

At least 58 people have been killed since January in protests organised by Madhesi activists seeking more government jobs and seats in parliament for their people, who live along the narrow strip of the Terai region bordering India.

The protests have overshadowed a peace process between the Maoists and the government to end a decade-long insurgency in which more than 13,000 people have died.

U.N. High Commissioner for Human Rights Louise Arbour said she was "deeply shocked" by the killings, which she stressed should not be allowed to jeopardise the peace process.

"I urge the authorities to take all necessary steps to initiate a full and impartial investigation into the killings and other violent incidents and to hold accountable anyone found to be responsible," she said in a statement released in Geneva.

The U.N. envoy in Nepal, Ian Martin, said in Kathmandu he hoped all Nepalese, especially in Terai, would commit themselves to pursuing their goals by exclusively peaceful means.

Continued unrest would threaten the ability to hold satisfactory constituent assembly elections due in June, he told reporters.

BLOODSTAINS

Bipin Gautam, a human rights activist, said bloodstains, shoes and belongings littered the dusty town after the clashes.

"It was like a battlefield," Gautam said of Wednesday's clashes. "People from both sides were chasing each other with batons and suddenly there was an exchange of gunfire," he said.

Maoists blamed supporters of Nepal's sidelined King Gyanendra for instigating trouble to derail the peace process.

Most of those killed were Maoist supporters, Maoist spokesman Krishna Bahadur Mahara said. The former rebels organised special memorial services for the victims.

The Madhesi group said Maoists started the trouble by scheduling a meeting at the same venue where it planned a rally. (Additional reporting by Laura MacInnis in Geneva)

AlertNet news is provided by