UPDATE 3-British envoy's convoy ambushed in Libya, two wounded

* Rocket-propelled grenade fired at vehicle

* British ambassador was in the convoy

* Two bodyguards hurt: embassy spokeswoman

* Benghazi has seen spate of attacks on foreigners

(Updates with British ambassador in convoy)

BENGHAZI, Libya, June 11 (Reuters) - A convoy carrying

Britain's ambassador to Libya was hit by a rocket-propelled

grenade on Monday, injuring two of his bodyguards in the most

serious of a spate of assaults on foreign targets.

The attackers ambushed the ambassador's convoy metres

(yards) from the consulate in the eastern city of Benghazi,

firing the weapon at the front of one of the vehicles and

blowing out the windscreen, local security officials said.

It was the fourth attack in three months on a foreign

mission in the city, the birth-place of the revolt which last

year overthrew Muammar Gaddafi. Some analysts say the violence

is the work of Islamist militants exploiting the security vacuum

left after Gaddafi's fall.

"A convoy carrying the British ambassador to Libya was

involved in a serious incident," said a spokeswoman for the

British embassy in the Libyan capital, Tripoli.

"Two close protection officers were injured in the attack

but all other staff are safe and uninjured ... We are working

with the Libyan authorities to establish who was responsible for

the attack."

A Reuters reporter at the scene of the attack, in Benghazi's

al-Rabha neighbourhood, said police had cordoned off the area

with waist-high concrete blocks. A damaged but still intact car

windscreen could be seen lying on the ground, along with

fragments of glass.

Accounts from local security officials, who spoke on

condition of anonymity, said the ambassador and his convoy had

visited a nearby restaurant for lunch and were returning to the

consulate when the attackers struck.

A source from the government's high security committee said

the rocket-propelled grenade was fired at the front of the

vehicle. It was not immediately clear if the ambassador, Dominic

Asquith, was in the car which was hit.

Another Libyan security official described one occupant of

the convoy as being injured in the shoulder. "There was a lot of

blood in the car that took him to hospital," said the official,

who spoke on condition of anonymity.

However, the high security committee source said: "The

wounds are minor, it's not serious."

The fact that the casualties were not worse suggested that

the British diplomats were using armoured vehicles, common

practice for Western missions in Libya.

VIOLENCE HOT SPOT

Benghazi was where the uprising broke out last year which

later ended Gaddafi's 42-year rule, but it is now a hot spot for

violence, with arms readily available and state security forces

struggling to assert their authority.

Monday's attack happened five days after an explosive device

was dropped from a passing car outside the offices of the U.S.

diplomatic mission in Benghazi. The blast that followed slightly

damaged the gate in front of the building.

On May 22, a rocket-propelled grenade hit the offices of the

International Committee of the Red Cross in the city, blasting a

small hole in the building but causing no casualties.

A month earlier in Benghazi, a bomb was thrown at a convoy

carrying Ian Martin, the head of the United Nations mission in

Libya. No one was hurt.

Security experts say the area around the city is host to a

number of Islamist militant groups who oppose any Western

presence in Muslim countries.

Under Gaddafi, eastern Libya was home to an Islamist

insurgency which tried to end his rule in the 1990s and later

established loose ties with al Qaeda. Most of that generation of

Libyan insurgents though, has since renounced violence.

The British ambassador has experience of working in a

hostile environment. He served in the Iraqi capital, Baghdad,

after the 2003 U.S. invasion unleashed an insurgency there.

The attacks on their diplomatic missions will be jarring for

London and Washington because they have been widely feted in

Libya for leading, along with France, the air assault that

helped force out Gaddafi last year.

The worst case scenario for Western governments is that the

spate of attacks could be the start of an Iraq-style insurgency

by Islamist militants. That could have an impact on oil exports

because the energy sector depends on foreign workers.

However, security analysts say an insurgency is unlikely to

gain the kind of momentum it did in Iraq, mainly because Western

states have no military presence on the ground in Libya.

(Additional reporting by Ali Shuaib and Marie-Louise Gumuchian

in Tripoli and Stephen Addison in London; Writing by Christian

Lowe; Editing by Jon Hemming)