* Turkish military hits targets in Syria
* Parliament authorises foreign military operations
* Russia proposes diluted UN text
By Jonathon Burch
AKCAKALE, Turkey, Oct 5 (Reuters) - Frightened residents of a Turkish border town shelled by Syria expressed scepticism on Friday that military and political retaliation by Ankara would succeed in deterring more deadly strikes by Damascus forces.
Turkish artillery bombarded Syrian military targets for a second day on Thursday, responding to the mortar fire that killed five people the day before in the southeastern town of Akcakale.
The salvoes killed several Syrian soldiers, and Turkey's parliament stepped up pressure on the political front by authorising cross-border military action in the event of further aggression.
In New York, the U.N. Security Council on Thursday strongly condemned the mortar attack by Syria and demanded that "such violations of international law stop immediately and are not repeated."
Turkish Prime Minister Tayyip Erdogan said Ankara would never want to start a war and the parliamentary vote was merely a deterrent, but people in the region remained fearful.
"We are stuck in the middle," said 33-year-old security guard Ibrahim Cilden in Akcakale. "If we're going to go to war, let's go to war, but right now we're sitting here like targets."
His house was a few doors from the one hit on Wednesday in the south of Akcakale by the border fence. The area is like a ghost town, bearing the scars of Syrian shells, mortar bombs and bullets that have strayed across the border in recent weeks.
Syria's ally Russia said it had received assurances from Damascus that the mortar strike had been a tragic accident, as forces loyal to President Bashar al-Assad battle rebels trying to overthrow his government in the area.
By late on Thursday, the Turkish guns had fallen silent, but U.N. spokesman Martin Nesirky said Secretary-General Ban Ki-moon was "alarmed by escalating tensions along the Syrian-Turkish border" and worried that the risk of a wider regional conflict was growing.
But the U.S. State Department said it considered Turkey's response to the Syrian shelling to be appropriate, proportionate and designed to deter any future violations of its sovereignty by Syria.
In Istanbul, about 5,000 people took to the city centre on Thursday evening in a peaceful anti-war protest, which also turned into a demonstration against Erdogan's ruling AK Party.
"The AKP wants war, the people want peace," "No to war, peace right now," the crowds chanted as police looked on.
The U.N. Security Council, in a rare agreement on Syria, condemned the Syrian attack. That came after two days of negotiations on an initial text rejected by Russia. Consensus within the council on anything related to Syria is unusual and it has been deadlocked over the country's 18-month conflict for more than a year, with Russia and China rejecting calls to sanction the Damascus government.
Moscow circulated its own version calling on both Turkey and Syria to exercise restraint. Western council members objected to Moscow's proposal, but revised the original draft.
"The members of the Security Council underscored that this incident highlighted the grave impact the crisis in Syria has on the security of its neighbors and on regional peace and stability," the 15-nation council said in the final version of its non-binding statement.
Turkey is sheltering more than 90,000 refugees from Syria and fears a mass influx similar to the flight of half a million Iraqi Kurds into Turkey after the 1991 Gulf War.