KHARTOUM, Sept 30 (Reuters) - Seven hundred people have been arrested during a week of the worst unrest in central Sudan in years, the government said on Monday, as protests continued against President Omar Hassan al-Bashir.

One week on from the start of demonstrations against subsidy cuts, police once again used teargas on protesters, this time women students at the Ahfad university in Khartoum's twin-city of Omdurman who chanted "We don't want Bashir", witnesses said.

At a news conference called by the government to put its side of the week's events, Interior Minister Ibrahim Mahmoud Hamad said 34 people had died, far fewer than the up-to-150 estimated by Sudanese human rights activists and some diplomats.

Hamad said police had not used live ammunition against protesters who, he said, had attacked more than 40 petrol stations, 13 buses and several government buildings.

"This has nothing to do with protests," Hamad said and added that there were indications that rebels from Sudan's borderlands were involved in the violence.

He dismissed photographs of shooting victims circulating on the Internet as fakes. "Most pictures on social media are actually from Egypt," he said.

In a tense exchange, journalists challenged Hamad, one of the most powerful ministers in Bashir's cabinet. "Why do you keep lying?" one reporter asked him.

Accusing foreign media of pursuing an anti-Bashir agenda, Sudan has closed the offices of two foreign television news channels: Saudi-owned al-Arabiya and Sky News Arabia, an off-shoot of Britain's Sky News, based in Abu Dhabi.

Information Minister Ahmed Belal Osman accused al-Arabiya of trying to bring an "Arab Spring" to Sudan by misreporting the protests. Several local newspapers have also been closed because of their coverage of the unrest.

The government of Bashir, who seized power in a 1989 coup, has resisted calls to repeal the subsidy cuts that pushed up gasoline prices by almost double overnight.

"We will continue implementing the economic programme," said Khartoum Governor Abdel Rahman al-Khidr.

On Saturday, a group of Islamists and members of Bashir's National Congress Party urged the president to reverse the austerity measures.

The cuts have been driven by a financial crunch since the secession of oil-producing South Sudan in 2011, which deprived Khartoum of three-quarters of the crude output it relied on for state revenues and foreign currency needed to import food.

The protests are much larger than demonstrations last year against corruption, inflation and earlier fuel subsidy cuts. But they are tiny compared to the masses who turned out to oust rulers in Egypt and Tunisia.

Bashir has stayed in power despite rebellions, U.S. trade sanctions, an economic crisis, an attempted coup last year and an indictment from the International Criminal Court on charges of masterminding war crimes in the western region of Darfur. (Reporting by Ulf Laessing and Khalid Abdelaziz; Editing by Robin Pomeroy)

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  • Sudanese anti-government protesters chant slogans during a demonstration in Khartoum, Sudan, Sunday, Sept. 29, 2013. (AP Photo/Khalil Hamra)

  • Sudanese anti-government protesters chant slogans during a demonstration in Khartoum, Sudan, Sunday, Sept. 29, 2013. (AP Photo/Khalil Hamra)

  • Sudanese anti-government protesters chant slogans during a demonstration in Khartoum, Sudan, Sunday, Sept. 29, 2013. (AP Photo/Khalil Hamra)

  • Sudanese anti-government protesters chant slogans during a demonstration in Khartoum, Sudan, Sunday, Sept. 29, 2013. (AP Photo/Khalil Hamra)

  • Sudanese men comfort one another during the funeral of Salah Sanhory, 26, who was killed on Friday Sept. 27, 2013 by security forces during an anti-government demonstration, in Khartoum, Sudan, Saturday, Sept. 28, 2013. (AP Photo/Khalil Hamra)

  • Sudanese relatives of Salah Sanhory, 26, who was killed Friday Sept. 27 by the security in an anti-government protest, mourn during his funeral in Khartoum, Sudan, Saturday, Sept. 28, 2013. (AP Photo/Khalil Hamra)

  • Sudanese relatives of Salah Sanhory, 26, who was killed on Friday Sept. 27, 2013 by security forces, mourn during his funeral in Khartoum, Sudan, Saturday, Sept. 28, 2013. (AP Photo/Khalil Hamra)

  • A Sudanese man chants slogans at the funeral of Salah Sanhory, 26, who was killed on Friday Sept. 27, 2013 by security forces during an anti-government protest, in Khartoum, Sudan, Saturday, Sept. 28, 2013. (AP Photo/Khalil Hamra)

  • Sudanese anti-government protesters chant slogans after the Friday noon prayer in the Omdurman district of northern Khartoum, Sudan, Friday, Sept. 27, 2013. (AP Photo/Khalil Hamra)

  • Sudanese anti-government protesters chant slogans after the Friday noon prayer in the Omdurman district of northern Khartoum, Sudan, Friday, Sept. 27, 2013. Security forces opened fire on Sudanese protesters Friday, witnesses said, as thousands marched through the streets of the capital in an opposition push to turn a wave of popular anger over fuel price hikes into an outright uprising against the 24-year rule of President Omar al-Bashir. (AP Photo/Khalil Hamra)

  • Sudanese anti-government protesters put a metal pole in an attempt to close a street amid a wave of unrest over the lifting of fuel subsidies by the Sudanese government, in the Omdurman district of northern Khartoum, Sudan, Friday, Sept. 27, 2013. (AP Photo/Khalil Hamra)