* U.N. blames Gbagbo forces for spate of deadly attacks
* Military sources deny launching any shells into Abobo
* Ivory Coast teetering on brink of all-out civil war
(Adds U.N. investigation, updates toll)
By Tim Cocks and Loucoumane Coulibaly
ABIDJAN, March 17 (Reuters) - At least 25 people were killed in Ivory Coast on Thursday when forces loyal to incumbent leader Laurent Gbagbo fired a series of shells into a neighbourhood that supports his rival, the U.N. mission said.
One shell exploded in a busy market in an area of Abobo, a part of the main commercial city Abidjan that supports presidential claimant Alassane Ouattara, two residents said.
U.N. mission spokesman Hamadoun Toure told Reuters by phone that an investigation team had gone to the scene of the blasts.
"They found that Gbagbo&${esc.hash}39;s security forces fired six projectiles and they killed between 25 to 30 people," he said, adding that at least 45, but up to 60 people had been wounded.
Gunfire and explosions were heard in various parts of Abidjan throughout Thursday. Toure had earlier confirmed the death toll from violence since a disputed mid-December election was now 410, so this attack would bring it up to 435.
The world&${esc.hash}39;s top cocoa grower has been in turmoil since the election between Ouattara and Gbagbo, which Ouattara is recognised internationally to have won but which Gbagbo has refused to concede.
A security source earlier denied involvement of pro-Gbagbo forces in the killing, saying they were no longer in the area.
"There have been no movements or firing from our positions on Abobo today," the security source said. "We&${esc.hash}39;re fighting rebels in Williamsville and Yopougon. We don&${esc.hash}39;t know what happened (in Abobo) and it isn&${esc.hash}39;t our concern. Ask the rebels."
Security in the main commercial city has been rapidly deteriorating since gunmen claiming allegiance to Ouattara took over its northern suburb, prompting pro-Gbagbo forces and allied youth militias to set up roadblocks and kill suspected rebels.
"I went to the market where the rocket landed. There were 12 dead bodies there, and there are many wounded," said witness Sumeiro Vassiriki. Arouna Sylla, another resident, said at least 10 people had been killed and many wounded.
Witnesses in Siaka Kone market in Marley, part of Abobo district, thought the shell had been fired by forces loyal to Gbagbo who arrived in an armoured vehicle.
Ouattara broke three months of silence on the gunmen fighting to defend his claim to the presidency on Thursday, saying he officially recognised the former rebels as the legitimate army [IDn:LDE72G2CF]
"INCREASE IN VICTIMS"
Fighting has also spread to the west, across a north-south ceasefire line in place since the end of a 2002-3 civil war, increasing fears that an election meant to reunite the country will instead reignite the conflict.
Some 450,000 people have fled their homes, 90,000 of them to neighbouring Liberia because of renewed fighting in the west.
A Reuters reporter heard explosions and machinegun fire coming from the direction of the west Abidjan neighbourhoods of Adjame and Williamsville, where security forces have launched a crackdown on suspected rebels, just north of the city centre, throughout the afternoon and late into the evening.
"The police are in position and firing in all directions," said Adjame resident Anatole Eba. "There are detonations from heavy weapons. Everyone&${esc.hash}39;s staying home."
Pro-Ouattara gunmen in the main city Abidjan have expanded their presence from a northern Ouattara bastion closer to the centre of town and strongholds of Gbagbo.
Those gunmen advanced across Abidjan on Monday, bringing their fight closer to the city centre and presidential palace.
Overnight, a Reuters reporter heard explosions and machinegun fire in the leafy Cocody suburb, where Gbagbo&${esc.hash}39;s house is located and broadcasts of state-run RTI television originate.
At least five people were killed by security forces in a crackdown on the Adjame area on Wednesday, witnesses said.
Human Rights Watch has warned Gbagbo&${esc.hash}39;s men that systematic killings of civilians may count as war crimes [ID:nLDE72E2SF]
The U.N. spokesman said some children had been killed or mutilated in the violence and some had suffered "psychological trauma from when their parents were killed before their eyes."
The International Monetary Fund on Thursday warned of "serious risks" from the power struggle in Ivory Coast, saying the longer it lasts the more severe its impact will be on the regional West Africa economy. [ID:nN17275454] (Additional reporting by Ange Aboa; Writing by Tim Cocks)
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