MANILA, Philippines (AP) _ Police arrested a man Friday on suspicion of starting a fire that razed a shantytown in Manila, leaving 7,840 people homeless.

Jose Quinanola was arrested before dawn inside a karaoke bar in Manila's Tondo district, close to the Happy Land property that burned Thursday, said police spokesman Fernando Robles.

Arson investigator Sgt. Reden Alumno said Quinanola admitted he took a methamphetamine before setting Thursday's four-hour blaze.

``He said he could not understand himself and that bad spirits made him to it,'' Alumno said.

Witnesses told arson investigators they saw Quinanola pour a liquid substance at his house shortly before the fire, and Quinanola said he set fire to a curtain inside.

Shortly after his arrest, angry residents tried to attack Quinanola, a known drug user and neighborhood tough guy, but were stopped by police, Robles said.

Alumno said a charge of ``consummated arson,'' which carries the death penalty, would be filed against Quinanola.

Police said 20 people were treated for slight injuries and smoke inhalation. There were no reports of deaths or missing people.

Celerina Sangil of the city social welfare department said 1,743 families, or 7,840 people, lost their homes. Fire investigators reported 600 destroyed buildings, she said.

Among those who lost their homes were 88 families who had been transferred to a tenement building by the government six years ago from shanties on Smokey Mountain, a large garbage dump on the shores of Manila Bay, Sangil said.

She said these families were to be moved to a temporary housing project beside Smokey Mountain. Local officials were still to discuss where to relocate the other fire victims.

Chief Superintendent Francisco Senot said the fire spread quickly through the slum community because the shanties were made of light, highly flammable materials. Firefighters also had a hard time because narrow streets and alleys prevented firetrucks from getting closer to the blaze.