By Juliana Liu and Amran Abocar

BEIJING/TORONTO (Reuters) - Beijing said on Wednesday the SARS virus threatened to overwhelm hospitals and it was acting to quell panic, but Toronto was jubilant after the WHO ended a warning against travel to Canada's financial capital.

Beijing's acting Mayor Wang Qishan said the next week would be critical in determining whether the spread of the pneumonia-like Severe Acute Respiratory Syndrome was being curbed.

A spike in the number of cases of SARS in the Chinese capital has sparked widespread fear and in some areas panic-buying of medicines and staple foods, as residents stock up to wait out the peak of SARS at home.

"As the panic of the public has not yet been alleviated, a great deal of work is needed to ensure social stability," Wang told foreign journalists.

"Due to a shortage of beds at designated hospitals, not all suspected SARS patients can be hospitalized in a timely manner," he said, adding that the government is expanding the number of hospitals handling the disease to more than a dozen.

Beijing is the hardest-hit area in the world, reporting well over 100 new SARS infections a day and about 1,350 cumulative cases with 66 deaths. The number of infections in the city has shot up from 37 since China began reporting more honest figures about SARS on April 20.

Beijing has already closed schools and theaters and put nearly 10,000 people under quarantine. Wang vowed to take "decisive" steps to contain the disease.

Asian leaders, meeting in Bangkok on Tuesday, adopted measures to isolate and control SARS outbreaks, including rigorous screening of international travelers, exchange of research, and regular reports about outbreaks.

Canada, the only country outside Asia where people have died of the virus that has no cure, also promised tougher steps, including screening at its airports.

"We are delighted with the World Health Organization's latest decision," Ontario Health Minister Tony Clement said. "And we certainly know that our vigilance must not stop."

The original WHO decision advising against travel to Toronto aroused howls of protest in Canada, which saw the warning hitting its economy.

LIKELY TO BECOME ENDEMIC

Health officials expect travelers to continue spreading the scourge in an increasingly interconnected world and say the disease -- and others like it -- is likely to become endemic.

It is "increasingly unlikely" that SARS will go away, said Dr Julie Gerberding, director of the U.S. Centers for Disease Control and Prevention. Other diseases would emerge the way SARS did, she said.

"We can anticipate doing this again and again."

SARS has infected nearly 5,800 people in 29 countries, killing at least 354 around the world. Scientists say it is mainly passed by droplets through sneezing and coughing.

At their Bangkok summit, the leaders and the WHO said the public had been seized with exaggerated about the disease and that air travel was safe.

Health ministers from South Asian countries also adopted measures to screen international travelers at a meeting in the Maldives on Tuesday and their counterparts from the European Union planned an emergency meeting next week.

Leaders of the 10-member Association of South East Asian Nations, along with China and Hong Kong, were encouraged at the Bangkok meeting that the WHO thought the virus was peaking in Singapore, Hong Kong, Vietnam and Canada.

But Singapore said it was too early to say its outbreak had peaked and warned of more unemployment as tourism plunges.

SARS weighed on financial markets in Asia on Wednesday, after rallies this week on hopes the outbreaks had peaked.

"The SARS problem is not over yet, that's for sure," said Gabriel Yap senior vice president at Singapore brokerage Kim Eng Ong Asia. "The market is just harboring hopes it will be over sooner than expected."

President Bush's chief economic adviser, Stephen Friedman, said in Washington he hoped SARS would have a limited effect on the U.S. economy, although he said it remained a potent threat. (Additional reporting by Maggie Fox in Washington, Jason Szep in Singapore, Chris Johnson in Bangkok, Carrie Lee in Hong Kong)