By Laila Kearney

SAN FRANCISCO, Oct 18 (Reuters) - Commuter rail workers in the San Francisco Bay Area went on strike on Friday after talks with management over a new contract broke down, throwing the morning commute into chaos in the traffic-clogged region.

The Bay Area Rapid Transit (BART) management and employee unions have been at loggerheads for months over pay and benefits for more than 2,000 train drivers and other union workers who are demanding large pay raises in part to offset being asked to contribute to their pensions and other benefits.

On Thursday, union officials said both sides had finally agreed on pay and benefits, but remained at odds over workplace rules. It remained murky as to precisely what details about workplace rules had foiled a deal. Under the terms of the last contract offer made public, BART management said it offered a 12 percent pay raise over four years to workers.

BART commuter train service is used for more than 400,000 rides each day and helps lighten traffic in San Francisco, which ranks as the third most congested metropolitan area in the nation after Los Angeles and Honolulu, according to the roadway traffic software company INRIX Inc.

The Service Employees International Union Local 1021, which is one of the two unions in negotiations with BART, set the strike to begin at midnight on Thursday.

A final negotiating session that began at 10 a.m. local time (1700 GMT) on Wednesday ended more than 28 hours later on Thursday afternoon with the two sides splitting up, the union said in a statement. BART spokeswoman Alicia Trost also confirmed talks had ended.

"This is a management strike caused by their unwillingness to make the deal," Antonette Bryant, president of the Amalgamated Transit Union Local 1555 which is the other main union in the strike, told reporters on Thursday.

A federal mediator who has been involved in the talks and who had previously reported that the sides were making progress, George Cohen, said on Thursday that they had been "unable to bridge the gap" in talks, and that federal mediation efforts would end.

The walkout was the second on the rail system this year, after BART workers went on strike for four and a half days in July, forcing some residents to miss work and others to endure commutes of three hours or more.

Marcella Lentini, 25, who works in marketing and uses BART to commute to San Francisco from her home in Oakland, said she would have to work from home on Friday due to the strike. "I'll have to fend for myself next week," she added.

BART would offer limited charter bus service for commuters during the strike, but that would only serve 6,000 people a day at select locations, the agency said on its website.