(Updates with some students freed, Maduro quotes, Twitter)
By Daniel Wallis and Deisy Buitrago
CARACAS, Feb 14 (Reuters) - Venezuelan authorities freed 25 student protesters on Friday pending trial and said that 74 others arrested after this week's deadly political turmoil would be processed within hours.
Demonstrators gathered in various cities as they have done since Wednesday. In a more affluent part of eastern Caracas, police used teargas and water cannons to clear a square of about 1,000 protesters, some of whom lit fires and threw stones at the security forces.
The protesters also briefly blocked a major highway nearby, denouncing President Nicolas Maduro over a litany of grievances including the repression of demonstrations since three people were shot dead this week following an opposition-led march.
Speaking at a televised event in the city center alongside top officials from the ruling Socialist Party and pro-government sports stars and entertainers, Maduro said he would not let the protesters cause chaos by closing important arteries.
"I'm not going to allow it. Enough! We will unblock them legally, and we won't let them block any more," he said. "The people have a right to their lives. How can four little crazy guys come along and try to close highways?"
The protesters who gathered in Caracas' Altamira Square, a heartland of past opposition activism, say they will defy the president's ban on demonstrations until he resigns.
They blame Maduro for complaints ranging from high inflation and shortages of basic products to widespread corruption and one of the worst murder rates in the world.
Maduro, a 51-year-old former union activist and bus driver, accuses his foes of seeking a coup against him similar to one that briefly toppled his predecessor Hugo Chavez in 2002.
However, there is no sign the demonstrations threaten to oust him, nor that the military, whose role was crucial to Chavez's 36-hour unseating, will turn against the president.
The protests could give Maduro a chance to unite competing factions in the Socialist Party, split the opposition where many moderates oppose the street tactics, and distract the public's attention from economic problems. He has called on supporters to march "for peace" in the capital on Saturday.
Venezuela's state prosecutor said late on Friday that 25 people were freed pending trial out of 99 people arrested nationwide in connection with the violence of the last two days. The other 74 would be processed in the coming hours, it said.
LOPEZ TAUNTS MADURO
Hardline opposition leader Leopoldo Lopez, whom the government calls the "face of fascism" and the intellectual author of the violence, remained in his Caracas home on Friday despite a judge's arrest warrant for him, colleagues said.
He says peaceful marches organized by his Popular Will party have been infiltrated by provocateurs and attacked by militantly pro-government gangs known locally as "colectivos."
The 42-year-old U.S.-educated economist taunted the president via Twitter: "@NicolasMaduro: don't you have the guts to arrest me? Or are you waiting for orders from Havana?"
Maduro's foes view him as a stooge of Cuba's communist government whose leaders lack Chavez's charisma and are driving the economy to ruin by sticking with failed socialist policies.
It was not immediately clear why police had not acted on the warrant, though such a move could fuel further protests.
Congress head Diosdado Cabello tweeted that the "fugitive" Lopez had tickets for a Saturday flight to Bogota, but gave no evidence of that. "You're not going to escape, coward," he said.
Lopez has for two weeks been urging Venezuelans onto the streets in a campaign dubbed "The Exit". He insists he only wants to promote legal change, such as Maduro's resignation or departure via a recall referendum, using peaceful protests.
But the tactic has split the opposition coalition, and a radical rump of masked demonstrators have been starting fires, throwing stones and damaging buildings.
Armed, pro-government "colectivo" groups have also joined the fray, with bands of motorcyclists roaming Caracas. A colectivo leader was among the three shot dead on Wednesday.
Sixty-six people have been injured in violence around the nation this week, authorities say.
'LINE OF FIRE'
Venezuela's leftist allies around Latin America sent Maduro messages of solidarity over what they termed "coup" plans. The European Union called for calm and dialogue.
David Smilde, a sociology professor at the University of Georgia who has studied Venezuela for 20 years, said both sides deserved censure for their handling of this week's events.
"Leopoldo Lopez's calls for peaceful mobilization are disingenuous when his acts seem to be intentionally creating the conditions for unintended violence. He is effectively putting student protesters in the line of fire to further what he sees as the interests of the country," Smilde blogged.
On the other side, the government should be reining in violent groups, he added. "Public security is the government's responsibility and they are coming up tragically short."
As users took to the country's most popular social network, Twitter, to blame their rivals, some subscribers to a state-run telecoms company, Cantv, reported problems loading images.
Opposition supporters quickly accused Cantv of seeking to censure images of the demonstrations, but the company denied on Friday that it was responsible for any technical faults.
"The servers for this application, which provide services worldwide, are not located in this country," Cantv said.
(Additional reporting by Daniel Bases in New York, and Girish Gupta, Brian Ellsworth, Andrew Cawthorne and Diego Ore in Caracas; Editing by W Simon, Meredith Mazzilli and Lisa Shumaker)