* U.N. envoy says 38 killed in Wednesday’s violence

* Security forces opened fire with live rounds in several towns

* Suu Kyi’s party says flags to fly at half mast at its offices

* U.N. Security Council to discuss situation on Friday – diplomats

The incidents followed the bloodiest day so far since the military overthrew the elected government of Aung San Suu Kyi on Feb. 1, with the United Nations special envoy on Burma saying 38 people had been killed on Wednesday.

The United Nations human rights chief, Michelle Bachelet, called on the security forces to halt what she called their “vicious crackdown on peaceful protesters”.

At least 54 people had been killed in total but the actual toll could be much higher, she said. More than 1,700 people had been arrested, including 29 journalists.

“Myanmar’s military must stop murdering and jailing protesters,” Bachelet said in a statement.

Activists said they refused to accept military rule and were determined to press for the release of the detained Suu Kyi and recognition of her victory in a November election.

“We know that we can always get shot and killed with live bullets but there is no meaning to staying alive under the junta,” activist Maung Saungkha told Reuters.

Police opened fire and used tear gas to break up protests in Yangon and the central town of Monywa, witnesses said. Police also fired in the town of Pathein, to the west of Yangon, and used tear gas in the eastern town of Taunggyi, media reported.

In Yangon, crowds of protesters soon assembled again to chant slogans and sing.

Big crowds also gathered peacefully for rallies elsewhere, including the second city of Mandalay and in the historic temple town of Bagan, where hundreds marched carrying pictures of Suu Kyi and a banner saying: “Free our leader”, witnesses said.

Hundreds of people attended the funeral of a 19-year-old woman shot dead in Mandalay on Wednesday, who was photographed wearing a T-shirt that read “Everything will be OK”. .

Earlier on Thursday, five warplanes made several low passes in formation over Mandalay, residents said, in what appeared to be a show of military might.

On Wednesday, police and soldiers opened fire with live rounds with little warning in several cities and towns, witnesses said.

“Myanmar’s security forces now seem intent on breaking the back of the anti-coup movement through wanton violence and sheer brutality,” said Richard Weir, a researcher at Human Rights Watch.

The group also mentioned an incident caught on camera-phone footage in which a man in police custody appeared to have been shot in the back.

A spokesman for the ruling military council did not answer telephone calls seeking comment.

‘FEW FRIENDS’

Suu Kyi’s National League for Democracy party said in a statement that flags would fly at half mast at its offices to commemorate the dead.

The U.N. special envoy for Myanmar, Christine Schraner Burgener, said on Wednesday she had warned deputy military chief Soe Win that the army was likely to face strong measures from some countries and isolation in retaliation for the coup.

“The answer was: ‘We are used to sanctions, and we survived’,” she told reporters in New York. “When I also warned they will go (into) isolation, the answer was: ‘We have to learn to walk with only few friends’.”

The U.N. Security Council is due to discuss the situation on Friday in a closed meeting, diplomats said.

U.S. State Department said Washington was “appalled” by the violence and was evaluating how to respond.

The United States has told China it expects it to play a constructive role, it said. China has declined to condemn the coup which its state media called a “major cabinet reshuffle”.

The turmoil has alarmed Myanmar’s Southeast Asian neighbours but an effort by some of them to encourage dialogue has come to nothing.

Singapore, the biggest foreign investor in Myanmar in recent years, advised its nationals to consider leaving as soon as they could due to the rising violence while it was still possible to do so.

Three Myanmar police constables crossed Myanmar’s northwestern border to defect to India after refusing to obey military orders, an Indian police official said.

The military justified the coup by saying its complaints of voter fraud in the Nov. 8 vote were ignored. Suu Kyi’s party won by a landslide, earning a second term. The election commission said the vote was fair.

Junta leader Senior General Min Aung Hlaing has pledged to hold new elections but given no time frame.

Suu Kyi, 75, has been held incommunicado since the coup but appeared at a court hearing via video conferencing this week and looked in good health, a lawyer said.

(Reporting by Reuters Staff; Writing by Ed Davies, Robert Birsel; Editing by Simon Cameron-Moore, Stephen Coates and Angus MacSwan)