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* U.S. retail sales rise at twice the rate expected

* Rebate checks seen as driver behind strong sales

* Economists say boost in sales is likely temporary

By Joanne Morrison

WASHINGTON, June 12 (Reuters) - Cash from government stimulus checks helped push U.S. retail sales up at twice the rate expected in May but the strength could be fleeting as households contend with soaring prices and the worst housing slump in decades.

The full percentage point gain in retail sales in May reported by the Commerce Department on Thursday surprised financial markets and bolstered bets the Federal Reserve would begin to bump up interest rates within a few months to tamp down inflation.

Higher gasoline prices gave a lift to service station sales last month, but even with those stripped out, sales rose 0.8 percent, the biggest gain in a year. Consumers snapped up a range of items from clothing to sporting goods to electronics.

Sales at general merchandise stores, which include discounters like Wal-Mart and Target, saw the largest increase in 14 months.