Greece was paralyzed on Tuesday by a 24-hour nationwide general strike called by labour unions, as Prime Minister Lucas Papademos and leaders backing his transitional government meet to decide on a new bailout to prevent a default in March.

Greek politicians are under increasing pressure from EU and IMF lenders to pass new austerity measures in exchange for a second 130 billion euro (171.2 billion U.S. dollars) rescue package.

Leaders failed to reach an agreement with EU, IMF auditors in Athens on Sunday and Monday.

Pressure is also being mounted by the Greek society, struggling with record high unemployment rates and deep recession since the start of the debt crisis in late 2009.

Most public services shut down on Tuesday, as citizens joined an anti-austerity strike organized by the country's two umbrella unions of public and private sector workers.

International creditors demand further reduction of labour costs and lower deficits to boost competitiveness and growth but labour unions are firmly opposed to further cutbacks on salaries, pensions and mass layoffs.

Braving heavy rain, some 10,000 demonstrators marched in front of the parliament in central Athens on Tuesday.

"The dilemma put forth is that without further harsh measures, we will face bankruptcy. Me and a lot of my colleagues and neighbours prefer a clear declaration of bankruptcy to this endless circle of austerity that leads to misery anyway," Thanassis Dimitroulopoulos, a paramedic at a public hospital, told Xinhua.

He said he already faces a sort of bankruptcy since he cannot afford to live his monthly salary of 500 euros (658.45 U.S. dollars).

"This way, Greek people will die of austerity," he added.

Protesters encircled the parliament building for hours on Tuesday, with banners such as "No to a return to medieval work conditions, no to cynical blackmail."

However, crowds dispersed when clashes broke out between riot police and a group of youth. No injuries were reported.

Greece has been kept solvent since 2010 through multi-billion euros of EU and IMF aid in exchange for austerity and structural reforms. However, lenders have not been impressed by the pace of change and are pressing for more sweeping reforms to avert a financial collapse of Greece that could shake the eurozone.