* U.S. now has 65 cases, Obama asks Congress for money
* WHO says all countries need to prepare for worst
* Mexico death toll at up to 159 (Updates with Mexico death toll now at up to 159)
By Kieran Murray
MEXICO CITY, April 28 (Reuters) - A global hunt for swine flu turned up new infections all around the world on Tuesday, and frightened governments warned people to stay away from Mexico, where up to 159 people have died.
The number of infections in the United States rose to 65, Canada has 13 and new cases were also confirmed in Israel and New Zealand.
But global health officials cautioned that the numbers meant little in a rapidly changing situation, with doctors and clinics rushing to test people with respiratory symptoms and no one sure just how far the virus had spread.
Americans, Canadians and Europeans were advised by their governments to avoid non-essential travel to Mexico. Argentina halted all flights from Mexico until Monday and Cuba cut air links for 48 hours.
Mexico closed all of its archeological sites until further notice on Tuesday, and cruise ships and tour operators turned away from the country, threatening to batter a tourism industry that is its No. 3 source of foreign currency.
In the United States, President Barack Obama asked Congress for an extra $1.5 billion to fight the flu threat, and California declared a state of emergency, allowing it to deploy more resources to prevent new infections.
Australia approved tough new powers to detain people suspected of carrying swine flu if the crisis escalates.
The World Health Organization said a pandemic -- a global outbreak of a serious new illness -- is not yet inevitable but that all countries should prepare for the worst, especially poorer developing nations. "They really get hit disproportionally hard," said the WHO's acting assistant director-general Dr. Keiji Fukuda.
A pandemic would deal a new blow to a world economy already in recession by forcing cuts in travel, trade and manufacturing output.
Seven countries have confirmed cases of the new swine flu and a dozen others have suspected infections.
NERVOUS INVESTORS
The global health crisis is unsettling financial markets and stock markets showed more losses on Tuesday.
"Prices remain in a bit of a swoon as market participants fret that a potential influenza pandemic might prove fatal to the frail signs of recovery just beginning to show," said Mike Fitzpatrick, vice president at MF Global in New York.
Airline shares were again hurt by fears of a sharp drop in traffic. Oil dropped almost 2 percent to below $50 a barrel and investors cut their exposure to riskier currencies.
The swine flu virus is not caught from eating pig meat products but several countries, led by Russia and China, banned U.S. pork imports. The EU said it has no plans to restrict pig meat products from the United States.
Mexico is one of the world's top vacation destinations but the flu scare is forcing forcing many cancellations.
Carnival Cruises scrapped stops at Mexican ports for three of its ships on Tuesday and Canadian tour operator Transat AT postponed flights to Mexico until June 1.
U.K. travel firms Thomson Holidays and First Choice decided to repatriate their customers from Mexico and cancel flights bound for the popular beach resort of Cancun, although most airlines continued to operate their services.
Experts say that while it is impossible to stop the spread of the disease, efforts to slow its progress could buy crucial time for countries to procure essential drugs.
The WHO's Fukuda said a mild pandemic is possible but he also cautioned that the 1918 "Spanish" flu that killed tens of millions of people emerged from mild beginnings.
Worldwide, seasonal flu kills between 250,000 and 500,000 people in an average year.
In Mexico City, many residents are staying in their homes and authorities have shut schools, cinemas, stadiums, restaurants and even churches.
People from company directors to couriers wore face masks while airlines checked passengers for flu symptoms and shoppers stocked up on food, water and surgical masks, but the usually hectic city is otherwise very quiet. The government has shut all schools across Mexico until at least May 6.
Mexico says the first fatal case that alerted authorities to the strange new virus was in the southern state of Oaxaca but they have not yet found the origin of the outbreak.
One mystery was why the virus has apparently killed scores of people in Mexico while cases outside the country have been relatively mild and no one has died.
WHO officials say they will not know the answers for a while, while acting U.S. Centers for Disease Control and Prevention director Dr. Richard Besser said he expected U.S. deaths would be discovered as doctors searched. (Additional reporting by Maggie Fox in Washington; Jonathan Lynn and Laura Macinnis in Geneva; Helen Popper, Robin Emmott and Mica Rosenberg in Mexico City; Jeff Franks in Havana; Tan Ee Lyn in Hong Kong; and Lincoln Feast in Singapore; Editing by Maggie Fox and Doina Chiacu)