By Tarek Amara and Andrew Hammond

TUNIS | Thu Jan 27, 2011 10:49am EST

(Reuters) – Protesters stormed police barricades in the Tunisian capital on Thursday and the government prepared to dismiss key loyalists of ousted leader Zine al-Abidine Ben Ali in the face of widespread public anger.

Ben Ali fled to Saudi Arabia on Jan. 14 when weeks of violent protests against poverty, repression and corruption toppled him after 23 years in power.

Since then, an interim government that includes many former ruling party officials has struggled to impose order as protesters demand that the makeshift coalition be purged of Ben Ali’s allies.

On Thursday, protesters broke through police lines outside the prime minister’s office, where hundreds of demonstrators have pledged to camp out until the government resigns.

A small group said they had begun a hunger strike as hundreds more swelled the protests.

“The reshuffle will be announced tomorrow, Thursday,” government spokesman Taieb Bakouch was quoted as saying on the Tunisian state news agency on Wednesday. Political sources said the interior, defence and foreign ministers were to be replaced.

It remained unclear whether the protesters would accept the likely new ministerial line-up.

“If the new cabinet line-up remains dominated by figures close to the ousted regime, further demonstrations — either spontaneous or fomented by the labour union — are likely,” Eurasia group analyst Mohammed El Katiri said.

Tunisia’s uprising has electrified Arabs across the Middle East and North Africa, where many countries share the complaints of poor living standards and authoritarian rule.

Inspired by Tunisia’s example, thousands of Egyptians have taken to the streets to demand an end to President Hosni Mubarak’s 30-year rule, clashing with police who fired tear gas and used water cannon.

In addition to the cabinet reshuffle, Tunisia is aiming to set up a council of “wise men” to guide the country to democracy from the authoritarian state run by Ben Ali.

“PROTECT THE REVOLT”

Veteran politician Ahmed Mestiri, a prominent figure during the era of Tunisia’s independence leader Habib Bourguiba, said he hoped to head the council.

“The council would protect the revolt that broke out spontaneously. The time has come for the process to be structured,” Mestiri, 80, said in an interview on Wednesday.

Amnesty International said that it had established that security forces used disproportionate force to disperse protesters and in some cases fired on fleeing protesters and bystanders.

The human rights group said doctors’ testimonies seen by its researchers show that some protesters were shot from behind, indicating that they were fleeing. Others were killed by single shots to the chest or head, suggesting deliberate intent to kill.

“This shocking evidence confirms that the Tunisian security forces were using lethal methods to quell discontent and to deter protesters,” said Hassiba Hadj Sahraoui, Deputy Director of Amnesty International’s Middle East North Africa Programme.

In the unrest that brought down Ben Ali, the United Nations has said that 117 died, including 70 killed by gunfire.

A U.N. human rights team begins work in Tunisia later on Thursday. The 8-strong team will investigate past violations and advise the interim government on justice and reforms.

Tunisia says it is seeking international arrest warrant to bring Ben Ali, his wife and other family members to justice for theft and currency offences during their rule, when those surrounding the president grew wealthy.

Despite the clashes, the interim government announced it would reduce the curfew, in place since the revolt, by several hours, effective from Wednesday night.

Concern about political instability in north Africa was reflected by ratings agency Fitch, which cut its growth forecast for Tunisia this year to two percent from five percent and expects foreign direct investment to fall by a third.

There were also sharp rises in the cost of insuring debt issued by Tunisia, Egypt and Morocco against default.

Fitch said however that it did not expect a Tunisia-style uprising in Morocco, because the country has invested in social housing and made progress in alleviating poverty.

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