KOLKATA, India (Reuters) - Villagers at the centre of abird flu outbreak in India's east refused to hand over theirchickens and ducks for culling on Thursday, hampering effortsto stamp out the disease in poultry.

But in neighboring Bangladesh the culling of thousands offowl went on smoothly after the virus was detected in threemore districts.

In both countries the virus seemed to be spreading withfresh bird deaths reported from new areas. Neither country hasreported any human infection.

Veterinary workers coaxed villagers at the centre of anoutbreak in India's West Bengal state to hand over theirpoultry and observe hygiene practices needed to limit thespread of what the World Health Organisation says is the worstbird flu outbreak in India.

The latest outbreak in West Bengal has affected threedistricts, but officials said the infection could be morewidespread as they waited for test results of more birds.

In the quarantined West Bengal village of Margram,villagers told a Reuters photographer their birds were notinfected and that they were unhappy with a dollar-a-birdcompensation.

Many let loose their ducks and chickens so that veterinaryworkers found it difficult to catch and kill them.

"We have asked our officers to resolve all disputes andspeed up culling," said Sanchita Bakshi, a West Bengal healthofficial, said.

West Bengal had said on Wednesday it could take up to aweek to cull 400,000 birds. Only a few thousand had been killeda day later.

Neighboring Bangladesh culled nearly 25,000 fowls afterbird flu spread to three districts of Borguna, Rajshahi andJessore, a livestock ministry official said.

Fowls were also culled in the southern coastal district ofBarisal as the virus spread to 25 of Bangladesh's 64 districtssince the detection of H5N1 strain in March last year.

Suspected outbreaks were reported at a farm in northernRangpur district, where the virus has resurfaced.

The latest outbreak of the H5N1 strain in West Bengal'spoultry, the fourth in India since 2006, has killed more than35,000 chickens and birds.

Chicken deaths were also being reported from new areas inWest Bengal, but the state's animal resources minister said itmay not be bird flu.

"A total surveillance is in place," minister Anisur Rahamantold Reuters in Kolkata, West Bengal's capital.

But bird flu is putting people off poultry products. InKolkata chicken sales dropped by half and most airlinesoperating out of the city had stopped serving chicken.

(Additional reporting by Ruma Paul in DHAKA; Writing byKrittivas Mukherjee; Editing by Alistair Scrutton and SanjeevMiglani)