* Kayani expresses "grave concern" about Karachi situation
* Police and paramilitary force can still handle situation
* Analysts say army unlikely to step in for now
By Zeeshan Haider
ISLAMABAD, Aug 21 (Reuters) - Pakistan's military is ready to help stem a tide of political and ethnic violence in the city of Karachi, if the civilian government asked it to do so, a newspaper on Sunday quoted country's powerful army chief as saying.
The comments by General Ashfaq Kayani came amid growing calls by political parties and business groups for the army to step in to stop worsening security situation in the commercial hub of the country where about 900 people have been killed in violence this year, almost a third of them in July.
The News said Kayani expressed "grave concern" over the security situation in Pakistan's biggest city and said the army was "ready, if the government called on it, to control the situation in Karachi."
But he also said the police and paramilitary would, if properly deployed, be able to stem the unrest.
"Karachi is the jugular vein of country's economy and it will be great injustice if the deteriorating law and order situation is allowed to continue for a longer period," the newspaper quoted him as saying.
Analysts say the army, already fighting a growing insurgency by Taliban and other Islamist militants is unlikely, at least for now, to heed calls of intervention.
The army has ruled Pakistan for more than half of its 64 years of independence and is seen as the most efficient institution in the country where civilian governments are largely perceived as corrupt and ineffective.
Karachi has a long history of violence, and ethnic, religious and sectarian disputes and political rows can often explode into battles engulfing entire neighbourhoods.
This bout of unrest is blamed on gangs with links to three rival political parties vying for influence: the ruling Pakistan People's Party, the Muttahida Qaumi Movement (MQM), which dominates Karachi, and the ethnic-Pashtun Awami National Party.
Street thugs and ethnic gangs have been used by political parties as foot soldiers in a turf war in the city. All three parties deny any involvement.
Karachi contributes about two-third of Pakistan's tax revenue and is home to ports, the stock exchange and central bank and on Saturday, business leaders called on the army to intervene to stop the violence.
In the 1990s, the army carried out an operation in Karachi, primarily against the MQM, which was blamed for instigating violence at that time. (Editing by Miral Fahmy)