SEOUL (REUTERS) - A fire at a rural South Korean hospital for chronically ill elderly patients on Wednesday killed 21 people and injured eight in the second major fire this week s the country still mourns victims of a ferry disaster last month.

The midnight blaze at the hospital in the southwest region of Jeolla was put out relatively quickly, but most of the victims were elderly patients unable to walk or move freely, leading to the large number of casualties, fire officials said.

An 81-year-old man is in police custody and is being questioned on suspicion of arson after he was seen on surveillance camera walking into an empty room where the fire is believed to have started, a police official said by telephone.

The man has been identified as a patient at the hospital and is suffering from dementia, the official said.

All the victims were on the second floor of one building, and most of them suffered smoke inhalation, a local fire department official said.

The hospital held patients who required long-term care, many with dementia or disability as a result of a stroke, local media reports said.

In another fire on Wednesday morning, one person was injured when a fire broke out at a discount chain's parking lot in central Seoul, Xinhua news agency reported, quoting local tv station YTN.

The fire started at around 9.10am local time at a parking lot on the fifth floor of the discount chain Homeplus and was extinguished completely some 20 minutes later. No deaths were reported.

The fire was believed to have been caused by an overheated engine of a car parked there.

South Korea, Asia's fourth-largest economy and a leading manufacturing powerhouse, has developed into a vibrant and technically advanced democracy, but it faces criticism that regulatory controls and safety standards have not kept pace.

The country is mourning the deaths of more than 300 people who drowned when a heavily overloaded ferry capsized and sank on April 16, the country's worst maritime disaster in 20 years.

A fire at a large shopping mall complex killed eight people on Monday when smoke and toxic fumes spread rapidly. Fire screens designed to stop the spread of fire and smoke did not function in the relatively new building.

Later on Wednesday, there was a fire on a subway train in Seoul after a man sprayed flammable material and lit it, but it was put out within minutes, Yonhap news agency reported quoting witnesses. The police have the man in custody, Yonhap said.

There have been two subway accidents in the past month that left nearly 200 people injured.

The last major accident on a South Korean subway system was in 2003, when 192 were killed in a subway fire in the city of Daegu, which prompted major safety improvements.