Greek lawmakers looked set to endorse a new austerity deal on Sunday to secure an EU/IMF bailout and avoid national bankruptcy, defying public rage and protesters who fought pitched battles with riot police outside parliament.

Lawmakers came under immense pressure from both sides, with tens of thousands of demonstrators pouring into Syntagma Square before parliament, while the government warned that rejection would demand unimaginably harsher sacrifices by Greeks.

Black-masked protesters threw petrol bombs, creating a wall of fire, and homemade bombs made from gas canisters as riot police advanced across the square on the crowds, firing tear gas and stun grenades. Loud booms could be heard inside parliament.

Tear gas has reached the parliament chamber, said leftist lawmaker Panagiotis Lafazanis.

After days of dire warnings and threats of rebellion, parliament began debating a bill setting out 3.3 billion euros ($4.35 billion) in wage, pension and job cuts this year alone, to secure funds Greece needs to avoid bankruptcy next month.

Finance Minister Evangelos Venizelos told parliament that Greece had no easy way out and the alternative to the international bailout - bankruptcy and a departure from the euro zone - would be far worse for Greeks.

The choice is not between sacrifice and no sacrifices at all, but between sacrifices and unimaginably harsher ones, he told a stormy debate expected to run well into the night.

One small party has already pulled out of the coalition of Prime Minister Lucas Papademos in protest against the terms of the 130-billion-euro rescue package from the European Union and International Monetary Fund - Greece's second since 2010.

A number of lawmakers from the two biggest government parties, socialist PASOK and conservative New Democracy, have also threatened to rebel but their numbers did not appear to be enough to sink the bill.

Greece needs the international funds before March 20 to meet debt repayments of 14.5 billion euros, or suffer a chaotic default which could shake the entire euro zone.

As is usual in Greek protests, only a small fraction of the crowd fought the police. Others held up banners saying Popular uprising!, It's us or them! and Don't gamble away all we have achieved.

An ambulance was seen rushing to the square and police said two protesters were injured in the clashes.

Inside parliament, Venizelos said Greece's future in the European mainstream was at stake.

Anyone who wants to remain in the euro and in the euro zone must abide by some rules, he said. The law must be passed by midnight because come Monday morning, the banking and financial markets must have got the message that Greece can and wants to survive.

(Writing by David Stamp)

International Monetary Fund