* U.S. Navy says bodies of missing sailors found
* Commander says damaged destroyer could have foundered or sunk
* Damage described as substantial, desperate crew work saved ship
* S. destroyer collided with container ship early on Saturday (Adds Abe's comment in last two paragraphs)
By Tim Kelly and Linda Sieg
YOKOSUKA, Japan, June 18 (Reuters) - The bodies of missing sailors were found in flooded compartments of the USS Fitzgerald, which came close to sinking after a collision with a container ship off Japan tore a gash under the warship's waterline, the U.S. Navy's Seventh Fleet commander said on Sunday.
Vice Adm. Joseph P. Aucoin declined to say how many of the seven missing sailors had been recovered, but Japanese media said all had died. “Out of concern for the families and the notification process, I will decline to state how many we have found at this time,” Aucoin told a news conference.
The search at sea had ended, Aucoin said.
The USS Fitzgerald could have foundered, or even sunk, but for the crew's desperate efforts to save the ship, he said.
"The damage was significant. There was a big gash under the water," Aucoin said at Yokosuka naval base, home of the U.S. Seventh Fleet, the docked Fitzgerald behind him.
"A significant portion of the crew was sleeping" when the destroyer collided with the Philippine-flagged container ship, destroying the commander's cabin, he said.
The Fitzgerald is salvageable, he said, but repairs will likely take months. "Hopefully less than a year. You will see the USS Fitzgerald back," Aucoin said.
Multiple U.S. and Japanese investigations are under way on how a ship as large as the container could ram into the warship in clear weather.
Aucoin was asked if damage on the starboard side indicated the U.S. ship could have been at fault, but he declined to speculate on the cause of the collision. Maritime rules suggest vessels are supposed to give way to ships on their starboard.
The Seventh Fleet said in a statement earlier on Sunday: "Divers were able to access the space and found a number of bodies." They were transferred to a U.S. naval hospital for identification, it said.
The Fitzgerald collided with the merchant vessel more than three times its size some 56 nautical miles southwest of Yokosuka early on Saturday.
Three people were medically evacuated to the U.S. Naval Hospital in Yokosuka after the collision, including the ship's commanding officer, Bryce Benson, who was reported to be in stable condition, the Navy said.
The other two were being treated for lacerations and bruises.
The Fitzgerald limped into port on Saturday evening, listing around 5 degrees, a U.S. Navy spokesman in Yokosuka said. The flooding was in two berthing compartments, the radio room and auxiliary machine room, he said.
There were 285 crew onboard, the spokesman said.
Benson took command of the Fitzgerald on May 13. He had previously commanded a minesweeper based in Sasebo in western Japan.
Japanese authorities were looking into the possibility of "endangerment of traffic caused by professional negligence", Japanese media reported, but it was not clear whether that might apply to either or both of the vessels.
The U.S. Navy said the collision happened at about 2:30 a.m. local time (1730 GMT Friday), while the Japanese Coast Guard said it was 1:30 a.m. local time.
Japan's Nippon Yusen KK, which charters the container ship, ACX Crystal, said in a statement on Saturday it would "cooperate fully" with the Coast Guard's investigation of the incident.
At around 29,000 tons displacement, the ship dwarfs the 8,315-ton U.S. warship. It was carrying 1,080 containers from the port of Nagoya to Tokyo.
None of the 20 crew members aboard the container ship, all Filipino, were injured, and the ship was not leaking oil, Nippon Yusen said. The ship arrived at Tokyo Bay later on Saturday.
The waterways approaching Tokyo Bay are busy with commercial vessels sailing to and from Japan’s two biggest container ports in Tokyo and Yokohama. But such collisions at sea are rare in an age of advanced navigational technology.
Naval historians recall possibly the last time a warship was hit by a larger vessel in peacetime was in 1964 off the coast of Australia’s New South Wales. The HMAS Melbourne, an aircraft carrier, collided with the destroyer HMAS Voyager, shearing the much smaller vessel in half and killing 82 of the Voyager's crew.
Japan's Prime Minister Shinzo Abe sent a message to U.S. President Donald Trump on Sunday saying he was “in deep sorrow” over the Fitzgerald incident. He added that he “highly respects people involved in the U.S. military who every day make a big contribution for protecting peace for our nation and the region under the strong U.S.-Japan alliance.”
Reporting by Tim Kelly and Linda Sieg; Additional reporting by Henning Gloystein; Editing by Bill Tarrant