(Adds new government moves, business details, quotes)
By Emma Pinedo, Inti Landauro and Joan Faus
MADRID, March 20 (Reuters) - Spanish authorities said on Friday they would turn a Madrid conference centre into a giant military hospital for coronavirus patients, as Europe's second-worst outbreak claimed another 235 lives and the government warned the worst days lay ahead.
Spain's worst single-day death toll yet brought the country's total fatalities above 1,000.
Spain has swiftly followed Italy to become the second European country where hundreds of people are being killed by the coronavirus daily. The death toll shows little sign of slowing.
Some 5,500 hospital beds, including intensive care units, will be set up inside the 240,000 square metre IFEMA conference centre on the capital's outskirts to cope with surging demand expected in the coming days, the Madrid region said in a tweet.
"The most difficult days are coming now," health emergencies chief Fernando Simon told a news conference.
The capital has become the epicentre of the disease in Spain. With nearly 20,000 cases reported as of Friday, Spain overtook Iran to become the world's third hardest-hit country by the pandemic after China and Italy. The Madrid region accounts for 628 deaths and 7,165 cases.
Health Minister Salvador Illa said Spanish hospitals were running several clinical trials to treat severe and mild cases of the coronavirus, while the science ministry said researchers were working on potential vaccines and detection tests.
The government promised measures on Thursday to protect the elderly and staff at nursing homes after large numbers of deaths.
Some 30 firefighters were involved in an extensive disinfection operation at a Madrid nursing home, and a military team was working in another.
On Friday the government said providing more face masks would be a priority and it could also do more to help the most vulnerable groups. The justice ministry said 1,000 forensic doctors and technicians would be redeployed to tackle the epidemic.
The country has ramped up efforts to curb the spread of the disease in the past week, ordering a nationwide 15-day state of emergency on Saturday that bars people from all but essential outings. Bars, restaurants and most shops have been shut and transport restricted.
Interior Minister Fernando Grande-Marlaska said police would start checking this weekend that no one was breaking these restrictions. He said more than 30,000 people had been fined and 300 arrested since they were announced.
"The confinement measures taken in Spain are the most drastic taken in Europe ... and one of the most drastic worldwide," he said at a press briefing.
The lockdown is also having a ruinous impact on the economy, which already had one of the developed world's highest unemployment rates.
Inditex, owner of clothing chain Zara, said it was considering temporarily laying off around 25,000 staff in Spain if the state of emergency continues beyond April 15.
Department store El Corte Ingles has moved more staff into its supermarket division as demand for click-and-collect service has increased by a factor of five, a spokeswoman told Reuters.
Banco Santander has closed nearly half its branches in Spain because fewer customers are visiting them as coronavirus spreads, a source said.
Cepyme, a lobby group representing small and medium-sized companies, said that assuming that the current lockdown lasts four weeks, it expected Spain to end the year with 300,000 fewer jobs than at the end of 2019.
On Thursday, the government gave all hotels seven days to shut.
Bank of Spain Governor Pablo Hernandez de Cos said the restrictive measures taken by European Union countries would lead to a "very severe" economic disruption, calling for coordination at the EU level. (Reporting by Emma Pinedo, Jesus Aguado, Inti Landauro, Sonya Dowsett and Joan Faus Writing by Andrei Khalip and Joan Faus Editing by Peter Graff and Giles Elgood)