Mexico says flu epidemic over the worst

* Mexico says H1N1 flu epidemic is past its peak

* Government looks to ease partial economic shutdown

* Experts say virus may be no more severe than normal flu

* WHO says world should not "lower guard" (Adds Calderon, health minister quotes, El Salvador cases)

By Louise Egan and Luis Rojas Mena

MEXICO CITY, May 3 (Reuters) - Mexico announced on Sunday its swine flu epidemic had passed the worst and experts said the new H1N1 virus might be no more severe than normal flu, although it could still have an impact on world health.

Health Minister Jose Angel Cordova showed journalists a graph indicating infections in Mexico, the epicenter of the H1N1 flu outbreak, had fallen sharply from a peak on April 24.

"The admittance of patients to hospitals has decreased and the health of patients in hospitals has improved," he told a news conference.

Laboratory tests have shown 590 firm cases of the virus so far in Mexico, out of which 22 people were confirmed to have died. This was more than the 19 confirmed deaths previously announced but Cordova said the tests were simply clarifying a backlog of suspected cases.

But new cases of the virus, which mixes swine, avian and human flu strains, still were being tracked across the world, keeping up fears of a pandemic.

The World Health Organization said its laboratories had identified a total of 898 H1N1 flu infections in 18 countries, including one case in Italy. Its toll lags national reports but is considered more scientifically secure. [nL3260192]

Separately, El Salvador reported its first two confirmed cases of the flu.

The WHO urged governments around the world not to lower their guard and to cooperate to prevent the flu spreading.

Mexican President Felipe Calderon rejected complaints at home that his government overreacted by shutting down public life for five days to prevent infection.

"This is a totally new virus in the world," Calderon told Mexican television. "We acted decisively, energetically and properly."

After days of alarm that had kept streets eerily quiet, Mexico City appeared more relaxed on Sunday, with some people venturing out on bikes or running. Many no longer wore the surgical masks that have been almost obligatory in the city in the last week as residents feared infection.

"ENCOURAGING SIGNS"

In the United States, the flu has spread to 30 states and infected 226 people, the U.S. Centers for Disease Control and Prevention said. It seems to be hitting mostly younger people, with very few cases in those over 50 years old. [nN03327731]

CDC acting director Richard Besser said there were "encouraging signs" the new strain was not more severe than what would be seen during normal seasonal flu.

But he still expected the virus to have a "significant impact" on people's health. "We're not out of the woods," Besser told "Fox News Sunday." [nN03498213]

The U.S. government said it hoped to have a vaccine ready for the new flu strain by the autumn.

Health officials and scientists from around the world have been focusing on how the new mutated flu strain may be passed between animals and humans.

The WHO said flu surveillance should be increased in both humans and animals now that the latest H1N1 strain was found to have infected pigs in Canada. [nL3279981]

Mexico has seen a stabilization of serious cases in the past few days, bringing some relief to millions of people who have stayed indoors in line with a government order for non-essential businesses to remain closed through Wednesday.

"We've been indoors since Friday. So now we've come out to enjoy some fresh air," cyclist Silvia Rodriguez told Reuters, relaxing on the grass of a central park in Mexico City.

Others were more wary.

"I'm not totally convinced that the worst is over," said Juan Antonio Hernandez, 48, a caretaker.

A Mexican Embassy official in China said Chinese authorities were quarantining more than 50 Mexican business people and tourists after some showed flu symptoms. [nPEK8030]

China denied Mexican complaints that discrimination lay behind the measures.

Asia's trade and tourism could be hit by the latest flu outbreak but lessons learned from the SARS epidemic in 2003 would boost efforts to counter the effects. SARS, or severe acute respiratory syndrome, killed more than 800 people around the world in 2003 after first appearing in southern China. (Additional reporting by Maggie Fox in Washington, Daniel Trotta, Anahi Rama, Jason Lange, Louise Egan, Pascal Fletcher and Esteban Israel in Mexico City, Tan Ee Lyn in Hong Kong, Laura MacInnis in Geneva; editing by John O'Callaghan)