SEOUL, South Korea (AP) _ Police detained 350 striking subway workers after they set fires on the tracks today, bringing morning commuter traffic to a standstill in South Korea's second largest city.

Authorities in Pusan, a port city 200 miles south of Seoul, said they would arrest union leaders accused of organizing the protest.

Subway workers first staged a sit-down strike on the subway tracks, demanding better working conditions and job security. When nonunion workers were sent in to keep the trains running on time, strikers set fire to furniture tossed on the tracks and doused with paint thinner.

Thousands of police were dispatched to remove the union workers.

Several striking workers threatened to jump off a 50-foot-high wall to protest the police intervention. They later climbed down voluntarily, the national news agency Yonhap reported.

No serious injuries were reported and subway operations returned to normal three hours after police moved in.

Management wants to cut the subway workforce by an undisclosed number of workers and staff trains with only a driver, eliminating the assistant's position, to rein in a growing deficit. Weeks of negotiations have failed to produce an agreement.

Pusan city is the majority owner of the subway, although there also are small, private investors.

Meanwhile, threats of more labor unrest soared today after the government announced it will privatize 11 state-owned corporations to increase efficiency and attract solely needed foreign investment.

The militant Korean Confederation of Trade Unions called for a new wave of strikes to fight increased restructuring and layoffs and also demanded a freeze on South Korea's annual $2.8 billion in arms purchases.