By Philip Pullella and Daniela Desantis

ASUNCION (Reuters) - Pope Francis appealed to world leaders on Saturday to seek a new economic model to help the poor, and to shun policies that "sacrifice human lives on the altar of money and profit."

It was the second time during his trip to South America that Francis, the first pope from the region, used a major speech to excoriate unbridled capitalism and champion the rights of the poor.

In Bolivia last Thursday, he urged the downtrodden to change the world economic order, denouncing a "new colonialism" by agencies that impose austerity programs and calling for the poor to have the "sacred rights" of labor, lodging and land.

"Putting bread on the table, putting a roof over the heads of one's children, giving them health and an education, these are essential for human dignity," he said.

He urged politicians and business leaders "not to yield to an economic model which is idolatrous, which needs to sacrifice human lives on the altar of money and profit."

He said those charged with promoting economic development must ensure it had "a human face" and he blasted "the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose".

"Corruption is the plague, it's the gangrene of society," he added during a heavily improvised speech at the rally, attended by Paraguayan President Horacio Cartes.

GAY RIGHTS

In a rare occurrence, the leader of a gay rights group took part in the gathering of 4,000 people at the invitation of local Catholic bishops.

"I left with the impression that the pope really wants to change things," Simon Cazal, director of SomosGay (We Are Gay), told Reuters after the meeting.

The Catholic Church teaches that homosexual tendencies are not sinful but homosexual acts are. Catholic gays have contested the Church's ban on homosexual activity, saying it deprives them of the intimacy that is part of a loving relationship.

Saturday was believed to be the first time a gay rights activist was known to have been invited to attend an event during a papal trip. One theme of a major meeting of Catholic bishops at the Vatican in October will be how the Church can reach out to homosexual Catholics.

On his way to the gathering, the pope made an unscheduled stop at a hospice for the terminally ill run by Italian priest Aldo Trento. "He was very moved," Trento said afterwards.

On Saturday morning, Francis visited the country's most sacred religious site, the shrine of the Madonna of Caacupe. It houses a statue of the Madonna said to have been carved by a Guarani convert to Christianity in the 16th century, when missionaries set up in the area.

Thousands of Argentines crossed the border to see their native son, nearing the end of a "homecoming" tour. He has also warned of irreversible harm to the planet and walked among prisoners.

The pope is due to lead a huge outdoor Mass on Sunday before returning to Rome. Argentine President Cristina Fernandez is expected to attend.

(Additional reporting by Mariel Cristaldo; Editing by Richard Lough, David Holmes and David Gregorio)