LONDON (Reuters) - Some 300 demonstrators waving flags and "Free Palestine" banners staged a noisy protest in central London on Wednesday against the two-day visit to Britain this week of Israeli Prime Minster Benjamin Netanyahu.

Minor scuffles with police broke out as they surged into the main road outside the Downing Street residence of British Prime Minister David Cameron who will hold talks with Netanyahu on Thursday morning.

Already 107,000 people in Britain have signed an online petition for Netanyahu's arrest after last year's fighting between Israel and Hamas in Gaza.

"We're here because we feel that Netanyahu should pay for his war crimes," said 21-year-old student Marion Tehami. "We're here to protest and let him know that he's not welcome in our country."

A short distance away in a separate cordoned off area, about 50 pro-Israel demonstrators waved the Israeli flag.

Britain says visiting heads of state have immunity from legal process and thus cannot be arrested.

In a statement, the government said on Tuesday: "We recognize that the conflict in Gaza last year took a terrible toll.

"However the prime minister was clear on the UK’s recognition of Israel’s right to take proportionate action to defend itself, within the boundaries of international humanitarian law."

More than 500 children were among the 2,100 Palestinians, the majority of them civilians, who were killed in last year's conflict. Seventy-three Israelis, almost all soldiers, were killed.

(Reporting by Sarah Young, writing by Stephen Addison; editing by Guy Faulconbridge)