HARARE, Zimbabwe (AP) _ Business leaders warned Wednesday that raids by ruling party militants on businesses and an aid agency threatened to collapse the country's already crumbling economy.

Militants assaulted managers at a downtown department store owned by Zimbabwe's largest retailing chain on Tuesday and also occupied the office of a private hospital and a steel firm. Executives said the militants demanded the rehiring of fired employees or large compensation payouts.

At least 20 militants also stormed the office of a German aid agency and forced its officials to pay $11,000 to two Zimbabwean employees laid off in 1999. The two former employees had a case pending before the state labor tribunal.

``It was extortion,'' said Felix Schmidt, head of the Friedrich Ebert Foundation, an educational charity that was raided.

Schmidt said he and staff members were threatened with assault during the six-hour occupation.

After a spate of such incidents in the past two weeks, the Confederation of Zimbabwe Industries, representing thousands of factories and commercial businesses, said Wednesday it had been inundated with reports from its members about ``external interference in labor matters.''

``Intimidatory activity shows as complete disregard for Zimbabwean laws and will drive the nation into total anarchy and irreparable damage to industry,'' said Zed Rusike, head of the organization, in a statement.

Zimbabwe is suffering its worst economic crisis since independence, with soaring inflation, record unemployment and acute shortages of gasoline and essential imports.

According to the confederation, about 400 manufacturing businesses shut down across the country in the past year, with the loss of at least 10,000 jobs.

German ambassador Fritz Flimm called government officials about the raid on the aid agency, but no action was taken to stop the occupation. Police were present but did not intervene, saying the militants were negotiating in a labor dispute, Schmidt said.

Flimm later sent a formal protest note to the government.