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Demonstrators - chanting against the World Bank and IMF - marched to Taksim Square, in the heart of Istanbul. The protests drew several thousand people - mostly leftists, anti-globalization groups, liberal democrats and trade unionists. Analysts say the IMF and World Bank do not have a good reputation among many people in Turkey, because they are associated with austerity programs and hardship.
Monday's announcement by the Turkish Prime Minister Recep Tayyip Erdogan that his government is close to signing a new agreement with the IMF raised the ire of many demonstrators.
"We are angry, but we know that we are right. We want just to protect our rights - and for this, we are here," said one man.
The demonstration was largely peaceful, until protesters attempted to march to where the World Bank and IMF meetings were being held.
Police moved in, using water cannons, tear gas and baton charges. One senior officer pulled out his revolver and waved it at the protesters. The center of Istanbul turned into chaos, with shoppers and protesters running for cover.
Armored cars raced up streets, spraying water and tear gas, while demonstrators threw rocks. Several fires were set. Shoppers cowered along side streets, choking on the gas while shops pulled down their shutters and banks closed. A taxi driver was reported to have had a heart attack from the effects of tear gas.
While the street battles raged, the IMF's Managing Director, Dominique Strauss-Kahn, warned of the danger of social unrest in emerging economies due to the global economic downturn.
"Nineteen million people are about to be put into extreme poverty because of the crisis. What we are talking about is not only higher unemployment or lower purchasing power in the lower income countries; it is about life and death. We could see in those countries, social unrest, political instability, or even war," he said.
But Strauss-Kahn said the crisis could be worse and said international cooperation has prevented a more serious global recession. He said leaders should now try and take the opportunity to shape what he called "the post crisis world".