NEW YORK (Reuters) - Pressure mounted on lawmakers Friday to agree on a $700 billion financial rescue plan after talks at the White House broke down in acrimony and the biggest bank closure in U.S. history roiled global markets.

President George W. Bush said that while there were disagreements on parts of the bailout plan, legislation would be passed by Congress. "We are going to get a package passed," he said in a brief appearance at the White House.

U.S. authorities shut bank Washington Mutual Inc on Thursday, selling its assets to JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz). In Europe, Belgian-Dutch financial group Fortis NV (FOR.BR: Quote, Profile, Research, Stock Buzz)(FOR.AS: Quote, Profile, Research, Stock Buzz) denied it had a liquidity problem after its shares tumbled for a fifth straight day.

Banks worldwide hoarded cash and demonstrated a growing reluctance to lend, driving rates that institutions charge to each other on loans to a record high in London on mounting uncertainty over what would be the largest financial bailout in U.S. history.

Global money markets dried up, forcing increased injections of cash from central banks as dollar borrowing rates remained high, particularly for three-month money. The market stress was aggravated by the looming quarter-end next week.

"The markets are just caught like a deer in the headlights, watching Washington, trying to figure out what the next step is," said Boris Schlossberg, director of currency research at GFT Forex in New York.

Fallout from the crisis battered shares of Wachovia Corp (WB.N: Quote, Profile, Research, Stock Buzz), the sixth-biggest U.S. bank, which fell as much as 26 percent. KeyCorp (KEY.N: Quote, Profile, Research, Stock Buzz), a large Midwest bank, slid nearly 7 percent.

Adding to the anxiety, new data showed U.S. economic growth was not as strong as previously thought in the second quarter as consumers boosted spending less vigorously and businesses trimmed investments, a sign confidence was sagging even before market turmoil deepened.

"I'm afraid that the real economy is unraveling very quickly," said Nigel Gault, chief U.S. economist at Global Insight Inc, Lexington, Massachusetts:

Europe's biggest bank, HSBC Holdings Plc (HSBA.L: Quote, Profile, Research, Stock Buzz), said it was cutting 1,100 jobs, citing the credit crisis.

With negotiations in Washington descending into clashes between Republicans and Democrats, U.S. Stocks prices fell more than one percent, shadowing losses in Asia and Europe. Government bond yields fell as investors sought safe havens.

"The negotiations over the bailout are sapping the enthusiasm that people could have for the market," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.

Fortis' stock fell nearly 10 percent on investor concerns about its liquidity, which its president said was not a problem. Banking woes extended to China, where shareholder Ping An Insurance (2318.HK: Quote, Profile, Research, Stock Buzz) sank 9.7 percent.