By Saliou Samb

CONAKRY, May 14 (Reuters) - Shops were shut and schools stayed closed in the Guinean capital Conakry on Monday after President Lansana Conte postponed talks with mutinous soldiers involved in violent pay protests.

Bursts of gunfire echoed through the night in Conakry's sprawling shanty towns as the army protesters continued to demand payment of salary arrears, even after Conte's government ceded on Saturday to their demands to replace the defence minister and senior commanders.

A senior military officer, who asked not to be identified, said Conte had postponed until Tuesday a meeting scheduled with leaders of the disgruntled soldiers. The talks had already been pushed back from Saturday.

General Mamadou Bailo Diallo, a retired head of the West African state's ground forces, took office on Monday as the new defence minister, after days of protests and looting by angry soldiers which have killed six people and injured at least 70.

The protests have underlined the simmering instability of the world's largest bauxite exporter. More than 130 people were killed in opposition-led strikes and riots against the ailing septuagenarian Conte's rule in January and February. Many school pupils stayed at home on Monday and few cars circulated on the pot-holed streets of the coastal capital of the former French colony.

Since the pay protests started earlier this month, soldiers in several garrison towns have been firing wildly into the air, raining down bullets onto the homes of terrified civilians.

"This is an atmosphere which reflects the psychosis provoked by the military's shooting," Education Minister Ousmane Souare told Reuters. "In Gueckedou (in southeastern Guinea), a pupil was shot dead last week. It is impossible to work calmly in these conditions."

The planned venue for the talks with the protesting soldiers was also moved from the Alpha Yaya Diallo military camp, near the airport in Conakry's volatile suburbs, to the Samory Toure base in the city centre, a pro-government stronghold.

"It is untrue that the president did not come to the (Alpha Yaya Diallo) camp due to security concerns," said the officer, adding that official business had kept Conte away on Monday.

The army, riven by generational and ethnic differences, has shored up Conte's autocratic rule since he seized power in a military coup in 1984, but analysts have questioned how long it will remain loyal in the face of increasingly vocal opposition.

The armed forces received a hefty pay increase in March, shortly after they had helped to quell the strikes and riots against Conte, a reclusive diabetic in his 70s whose opponents say is unfit to rule.

The strikes forced Conte to appoint a consensus prime minister, former diplomat Lansana Kouyate, tasked with curbing rampant corruption and rescuing Guinea's economy from runaway inflation and widespread unemployment. Kouyate, however, was given no responsibility for military affairs.

Himself a former general, Conte's relationship with the army has sometimes been difficult: soldiers used heavy weaponry to bombard the presidential palace during a 1996 mutiny to demand higher wages.