LAHORE, Pakistan – Thousands rampaged through two cities yesterday in Pakistan’s worst violence against Prophet Muhammad caricatures, burning buildings housing a hotel, banks, and a KFC, vandalizing a Citibank and breaking windows at a Holiday Inn and a Pizza Hut.

At least two people were killed in Lahore, where intelligence officials suspected outlawed Islamic terrorist groups incited the violence to undermine President Musharraf’s American-allied government.

An Associated Press reporter in Lahore saw crowd members who appeared to be orchestrating the attacks, directing protesters – some of whom were carrying containers of kerosene – toward particular targets. The demonstrators also set the provincial government assembly building on fire.

In the capital, Islamabad, hundreds of students stormed through the main entrance of the tightly guarded enclave that houses most foreign embassies, brandishing sticks and throwing stones. They were dispersed with tear gas, and no foreigners were hurt.

The unruly protests and deaths marked an alarming spike in the unrest in Pakistan over the cartoons, which first appeared in a Danish newspaper in September and have been reprinted by other Western newspapers. One cartoon depicts Muhammad wearing a turban shaped as a bomb with an ignited detonator string.

Many in this conservative Islamic country, as across the Muslim world, regard any depiction of the prophet as blasphemous. They reject the newspapers’ explanations that the cartoons have news value and represent free speech.

In southern Iraq, Basra’s provincial council demanded the withdrawal of Denmark’s 530-member military contingent from the region unless the Danish government apologizes for the cartoons – which it refuses to do, saying it has no influence over the press.

The president of the European Commission backed the Danish government’s refusal, saying freedom of speech cannot be compromised. “It’s better to publish too much than not to have freedom,” Jose Manuel Barroso told Jyllands-Posten, the paper that first published the drawings.

Demonstrations around Asia and the Middle East have subsided in recent days, including in Afghanistan, where 11 people died in riots last week. But the protests have gathered momentum in Pakistan this week.

In Lahore, the eastern city that is the main commercial hub in prosperous Punjab province, about 15,000 joined the protest organized by a little-known religious group and an Islamic school. The demonstration was also supported by associations representing local traders who shuttered businesses and most markets yesterday.

Witnesses said a minority of protesters in small groups ran amok down streets lined with old colonial buildings and shopping malls. Television footage showed at least one rioter firing a handgun.

Security forces fired live rounds into the air, but failed to stop protesters from setting fire to the Punjab provincial assembly and burning down four buildings housing a hotel, two banks, a KFC restaurant, and the office of Norwegian cell phone company, Telenor. Two movie theaters were also torched.

Witnesses said rioters also damaged over 200 cars, dozens of shops – many locally owned – and a large portrait of Mr. Musharraf. American brands were targeted. Protesters vandalized a Citibank branch and broke windows at a Holiday Inn hotel, a Pizza Hut, and a McDonald’s restaurants.

A security guard shot and killed two protesters trying to force their way into a bank, Interior Minister Aftab Khan Sherpao said. At least 11 other people were injured in the riots.

A security official said members of the outlawed militant group Sipah-e-Sahaba and others from Jamaat al-Dawat – which is linked to the outlawed Laskhar-e-Tayyaba group – were among the rioters, and were trying to turn the cartoon furor against Mr. Musharraf’s government.

“People belonging to outlawed militant groups participated in today’s rally, and some of them attacked public and private property,” said the official, who spoke on condition of anonymity because he was not authorized to speak to the press. “They were the ones who stirred up violence.”

Mr. Sherpao said that some “miscreants” were among the protesters, but refused to give details. He accused organizers of failing to honor a promise to keep the rally orderly.

In Islamabad, about 180 miles northwest of Lahore, police appeared lax in trying to control protesters.

A dozen policemen looked on as 1,000-1,500 people, mostly students, rushed through the main entrance of the diplomatic enclave, smashing street signs and a bank window.

American and British embassy staffers were confined to their compounds until police reinforcements with batons and shields used tear gas to disperse the demonstrators, who shouted “Death to America” and other slogans. About 50 protesters were detained.

Separately, about 50 lawmakers from the federal parliament staged a brief rally by the diplomatic enclave. A leader of an opposition Islamic coalition, cleric Hafiz Hussain Ahmad, said, “We have come to the doors of the embassies to take our voice to the ambassadors. There is anger in the Islamic world. If they do not listen, their problems will increase.”