UPDATE 1-Lula pledges $60 mln for Rio as drug war flares

* Lula offers federal money to help Rio fight drug gangs

* Third police officer in chopper crash dies

* Drug violence raises questions about Rio's 2016 Olympics (Recasts with Lula, Rio mayor quotes, details)

By Stuart Grudgings

RIO DE JANEIRO, Oct 19 (Reuters) - Brazil's president offered on Monday nearly $60 million in federal money to help Rio de Janeiro police combat drug gangs after 17 people were killed in weekend violence that raised questions over the city's ability to safely host the 2016 Olympics.

President Luiz Inacio Lula da Silva spoke to Rio state Governor Sergio Cabral to offer the 100 million reais ($58.3 million) and the use of Brazil's National Security Force, a federal police force that can be called in to boost security.

"Whatever the governor wants, we are ready to make all sacrifices to clean up the mess that these people impose on Brazil and the world," Lula said in a speech in Sao Paulo.

A turf battle on Saturday between hundreds of drug traffickers from rival gangs plunged Rio into a weekend of violence, with drug dealers shooting down a police helicopter over the "Hill of Monkeys" slum and setting at least eight buses set on fire.

Two police officers died when the aircraft exploded after crash landing and a third died in hospital on Monday from severe burns suffered in the crash.