By Taiga Uranaka and Yoko Nishikawa
TOKYO (Reuters) - Japan restored power to a crippled nuclear reactor on Sunday in its race to avert disaster at a plant wrecked by an earthquake and tsunami that are estimated to have killed more than 15,000 people in one prefecture alone.
Three hundred engineers have been struggling inside the danger zone to salvage the six-reactor Fukushima plant in the world's worst nuclear crisis since Chernobyl 25 years ago.
"I think the situation is improving step by step," Deputy Chief Cabinet Secretary Tetsuro Fukuyama told a news conference.
In one remarkable story of survival, an 80-year-old woman and 16-year-old youth were found alive under the rubble in the devastated city of Ishinomaki, nine days after the killer earthquake and tsunami, NHK public TV said, quoting police.
At the nuclear plant, workers braving high radiation levels in suits sealed in duct tape managed to connect power to the No. 2 reactor, crucial to their attempts to cool it down and limit the leak of deadly radiation.
Officials at plant operator Tokyo Electric Power Company (TEPCO) said the workers aimed to restore the control room function, lights and the cooling at the No. 1 reactor, which is connected to the No.2 reactor by cable.
But rising cases of contaminated vegetables, dust and water have raised new fears and the government said it will decide by Monday on whether to restrict consumption and shipments of food from the quake zone.
Tokyo, just 240 km (150 miles) south of the crippled plant and where the government said it had found traces of radioactive iodine, was subdued on Sunday but there was no sense of panic.
"There's no way I can check if those radioactive particles are in my tap water or the food I eat, so there isn't much I can really do about it," said Setsuko Kuroi, an 87-year-old woman shopping in a supermarket in the capital with a white gauze mask over her face.
"I don't plan big changes to my diet. And I only drink bottled water."
Police said they believed more than 15,000 people had been killed in Miyagi prefecture, one of four in Japan's northeast that took the brunt of the tsunami damage. In total, more than 20,000 are dead or missing, police said.
The unprecedented crisis will cost the world's third largest economy up to quarter of a trillion dollars and require Japan's biggest reconstruction push since post-World War Two.
It has also set back nuclear power plans the world over.
Economics Minster Kaoru Yosano put the economic damage at above 20 trillion yen ($248 billion), which was his estimate of the total economic impact of the 1995 earthquake in Kobe.
Government spending was likely to exceed the 3.3 trillion yen Tokyo spent after Kobe, which up to now has been considered the world's costliest natural disaster.
Japan's crisis spooked markets, prompted rare intervention by the G7 group of rich nations to stabilize the yen on Friday, and fueled concerns the world economy may suffer because of disrupted supplies to auto and technology industries.
Automaker General Motors Co said it was suspending all non-essential spending and global travel, plus freezing production at a plant in Spain and cancelling two shifts in Germany while it assessed the impact of the Japan crisis.
Japanese markets will be closed on Monday for a public holiday.
Encouragingly for Japanese transfixed on work at the Fukushima complex, the most critical reactor -- No. 3, which contains highly toxic plutonium -- stabilized after fire trucks doused it for hours with hundreds of tonnes of water.
"We believe the water is having a cooling effect," a TEPCO official said.
Workers aim to reach the troubled No. 4 on Monday or Tuesday.
If successful, that could be a turning point in a crisis rated as bad as America's 1979 Three Mile Island accident.
If not, drastic measures may be required such as burying the plant in sand and concrete, as happened at Chernobyl in 1986, though experts warn that could take many months and the fuel had to be cooled first.
Though public fear of radiation runs deep, and anxiety has spread as far as the Pacific-facing side of the United States, Japanese officials say levels so far are not alarming.
Some airports in Asia have been checking passengers arriving from Japan for signs of radiation, including Jakarta airport where officials were using Geiger counters on all those coming on flights from Japan.
Physicians for Social Responsibility, a U.S. non-profit advocacy group, called for a halt to new nuclear reactors in the United States.
"There is no safe level of radiation exposure," said Jeff Patterson, a former president of the group.
The quake and ensuing 10-meter high tsunami devastated Japan's north east coastal region, wiping towns off the map and making more than 360,000 people homeless in a test for the Asian nation's reputation for resilience and social cohesion.
Food, water, medicine and fuel are short in some parts, and low temperatures during Japan's winter are not helping.
The traumatic hunt for bodies and missing people continues.
"This morning my next door neighbor came crying to me that she still can't find her husband. All I could tell her was, 'We'll do our best, so just hold on a little longer,'" said fire brigade officer Takao Sato in the disaster zone.
About 257,000 households in the north still have no electricity and at least 1 million lack running water.
Prime Minister Naoto Kan, who has kept a low profile during the crisis except for shouting at TEPCO, sounded out the opposition about forming a government of national unity to deal with the crisis.
But the largest opposition party rejected that.
($1 = 80.610 Japanese Yen)
(Additional reporting by Chikako Mogi in Tokyo, and Yoko Kubota and Chang-ran Kim in Rikuzentakata, Gleb Bryanski in Yuzhno-Sakhalinsk, Russia, Eileen O'Grady in Houston, Fredrik Dahl and Sylvia Westall in Vienna, Suzanne Cosgrove in Chicago, Writing by Nick Macfie; Editing by Alex Richardson)