CHARLOTTESVILLE, Va./WASHINGTON (Reuters) - U.S. President Donald Trump denounced neo-Nazis and the Ku Klux Klan as criminals and thugs on Monday, bowing to mounting political pressure to condemn such groups explicitly after a white-nationalist rally turned deadly in Virginia.

Trump had been assailed from across the political spectrum for failing to respond more forcefully to Saturday's violence in Charlottesville. The head Merck & Co Inc (MRK.N), one of the world's biggest pharmaceutical companies, quit a presidential business panel as a result, saying he was taking a stand against intolerance and extremism.

The chief executives of two other prominent companies - sportswear manufacturer Under Armour (UAA.N) and semiconductor chip maker Intel Corp (INTC.O) - followed suit hours later.

Critics denounced Trump for waiting too long to address the bloodshed, and for initially faulting hatred and violence "on many sides," rather than singling out the white supremacists widely seen as instigating the melee.

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Democrats said Trump's reaction belied a reluctance to alienate white nationalists and "alt-right" political activists who occupy a loyal segment of Trump's political base. Several senators from his own Republican Party had harsh words for him.

Some 48 hours into the biggest domestic challenge of his young presidency, Trump tried to correct course.

"Racism is evil, and those who cause violence in its name are criminals and thugs, including the KKK, neo-Nazis, white supremacists and other hate groups that are repugnant to everything we hold dear as Americans," the president said in a statement to reporters at the White House on Monday.

"We condemn in the strongest possible terms this egregious display of hatred, bigotry and violence," he said.

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A 20-year-old man said to have harbored Nazi sympathies was arrested on charges of plowing his car into protesters opposing the white nationalists, killing 32-year-old paralegal Heather Heyer and injuring 19 people. The accused, James Fields, was denied bail at a court hearing on Monday.

Several others were arrested in connection with street brawls during the day that left another 15 people injured. And two airborne state troopers involved in crowd control were killed when their helicopter crashed.

Saturday's disturbances erupted after white nationalists converged in Charlottesville, home of the University of Virginia's flagship campus, to protest plans for removing a statue of General Robert E. Lee, commander of the pro-slavery Confederate army of the U.S. Civil War.

Trump's belated denunciation of white supremacists by name was welcomed by Heyer's mother, Susan Bro, who thanked the president for what she called "those words of comfort and for denouncing those who promote violence and hatred."

But not everyone was mollified.

"I wish that he would have said those same words on Saturday," responded Democratic Senator Mark Warner of Virginia on MSNBC. "I'm disappointed it took him a couple of days."

A group of community leaders meeting in Charlottesville likewise said they were unimpressed by Trump's latest message.

“Why did it take criticism from his Republican buddies to move him ... to adjust the moral compass that he does not possess?” said Don Gathers, who serves as chairman for the city’s commission on monuments and memorials.

Trump lashed out at his critics late on Monday on Twitter: "Made additional remarks on Charlottesville and realize once again that the #Fake News Media will never be satisfied...truly bad people!"

REBUKES FROM BUSINESS

Trump's revised statement on Charlottesville, following a day of silence despite a rising chorus of outrage over the violence, came after the chief executive of Merck & Co Inc (MRK.N) delivered one of the more noteworthy rebukes of the president.

Merck CEO Kenneth Frazier, who is black, resigned from Trump's American Manufacturing Council, saying expressions of hatred and bigotry must be rejected.

Trump quickly hit back on Twitter, but made no reference to Frazier's reasons for quitting the panel, instead revisiting a longstanding gripe about expensive medicines. Frazier would have more time to focus on lowering "ripoff" drug prices, Trump tweeted.

Frazier's resignation was followed hours later by two other members of the business panel quitting in protest, Under Armour CEO Kevin Plank and Intel chief Brian Krzanich.

"I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing," Krzanich wrote in a blog post.

The AFL-CIO organized labor federation that represents 12.5 million workers said it, too, was considering pulling its representative from the committee.

The jarring images of violence from Charlottesville and the heated public debate over racism resonated around the world, particularly in Europe where leaders are contending with a wave of xenophobia.

German Chancellor Angela Merkel told broadcaster Phoenix on Monday that clear and forceful action must be taken to counter right-wing extremism, and that "we have quite a lot to do at home ourselves."

About 130 people demonstrated outside the U.S. Embassy in London, some with placards reading "Fascism is not to be debated, it is to be smashed," and "I am an ashamed American."

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The United Nations said there must be no place in today's societies for the violent racism, anti-Semitism, xenophobia and discrimination on display in Charlottesville.

About 500 protesters assembled in front of the White House for a "Reject White Supremacy" rally, then marched to Trump's hotel on Pennsylvania Avenue nearby. In Manhattan, thousands of demonstrators stood outside Trump Tower on Fifth Avenue shouting "No Trump, no KKK, no fascist USA."

In Durham, North Carolina, a crowd of demonstrators stormed the site of a Confederate monument outside a court and toppled the bronze statue from its base. Television news footage showed protesters taking turns stomping and kicking the fallen statue as dozens cheered.

Hundreds of miles to the north, a Holocaust memorial in Boston was vandalized, but police said they quickly arrested a 17-year-old boy who was grabbed by onlookers who saw him shatter one of the monument's glass panels with a rock.

Asked on Monday whether one side was more responsible for the violence than another in Charlottesville, Police Chief Al Thomas said: "This was an alt-right rally" - using the term that has become a banner for various far-right ideologies that includes neo-Nazis, white supremacists and anti-Semites.

Fields appeared in a Charlottesville court on Monday by video link from the jail where he was being held on a second-degree murder charge, three counts of malicious wounding and a single count of leaving the scene of a fatal accident. His next court date was set for Aug. 25.

Several students who attended high school with Fields in Kentucky described him as an angry young man who passionately espoused white supremacist ideology.

The U.S. Justice Department was pressing its own federal investigation of the incident as a hate crime.

(Reporting by Scott Malone in Charlottesville and Jeff Mason in Washington; Additional reporting by Brandon Shulleeta in Charlottesville, Susan Heavey, Timothy Ahmann and Mohammad Zargham in Washington, Bernie Woodall in Fort Lauderdale, Fla., Emma Rumney in London and Michelle Martin in Berlin; Writing by Frances Kerry, Daniel Wallis and Steve Gorman; Editing by Bill Rigby and Mary Milliken)