URUMQI, China – Banks of paramilitary police fanned out in the far-flung Chinese city of Urumqi on Wednesday to try to stifle unrest days after 156 people were killed in the region's worst ethnic violence in decades.

Han Chinese took to the streets for the second day running, and even with helicopters hovering overhead there were scuffles in at least one crowd of around 1,000 as police apparently seized ringleaders, prompting cries of release them.

Urumqi, capital of northwestern Xinjiang region, had imposed a curfew the previous evening after thousands of Han Chinese armed with sticks, knives and metal bars, stormed through the city seeking revenge on Muslim Uighurs for Sunday's violence.

The continuing instability prompted President Hu Jintao to abandon plans to attend a G8 summit in Italy, and he returned home to monitor developments in energy-rich Xinjiang, where 1,080 people were also wounded in rioting and 1,434 have been arrested.

Financial markets again appeared unaffected and life was returning to the streets of Uighur neighborhoods.

But residents said night-time arrests were continuing and they had amassed collections of bricks and metal rods, and set up impromptu barricades, to defend against further Han attacks.

Urumqi airport was crowded with people anxious to leave, the official Xinhua news agency said. We fear Xinjiang is not safe any more, said one passenger, who refused to be identified.

Officials played down the continued unrest as heavy security, including thousands of boots on the ground and armed personnel carriers, brought peace to central parts of the city.

Most of the public were quite restrained, Urumqi's Communist Party Boss Li Zhi said of Tuesday's violence.

A handful of Han attacked Uighurs and there were a handful of Uighurs who attacked Han ... this handful of violent elements has been caught by the police and now the situation has been quelled, he added at a news conference in the Xinjiang capital.

There also was no official curfew, although by early evening the streets were emptying and vehicles with propaganda bullhorns drove around town telling people to go home as quickly as possible, and warning them not to listen to rumours.

But the government has given no details on the number of injured on Tuesday or whether anyone was killed, and the lack of information was fuelling uneasy stories.

A man in his 50s, who gave his name as Mohammed Ali, said he had heard from neighbors and friends that two men had died and two had been seriously wounded. Uighurs put the toll even higher.

Now we are scared to go anywhere, Mohammed Ali told Reuters. Doing even simple things becomes frightening.

Their fears was borne out downtown. In one street, two young boys were surrounded by an angry Han mob, with dozens trying to pull them down and grabbing at their hair.

BLOOD FOR BLOOD INCOMPATIBLE WITH RULE OF LAW

Xinjiang has long been a tightly controlled hotbed of ethnic tensions, fostered by an economic gap between many Uighurs and Han Chinese, government controls on religion and culture and an influx of Han migrants who now are the majority in most key cities, including Urumqi.

There were attacks in the region before and during last year's Summer Olympics in Beijing.

The anger exploding on both sides of the ethnic divide will now make controlling politically and strategically sensitive Xinjiang all the more testing for the ruling Communist Party.

Groups of Han gathered around reporters in Urumqi to talk about how angry they were and dragged away a Uighur woman who also approached. It was not clear what happened to her.

We want these terrorists punished. Our hearts are still filled with anger, said one of the Han Chinese men.

Li Yufang, a Han who owns a clothes store, said he was outraged by what had happened and wanted to protest again, but admitted it was unlikely with the heavy police presence.

Uighurs are spoiled like pandas. When they steal, rob, rape or kill, they can get away with it. If we Han did the same thing, we'd be executed, he said.

Beijing cannot afford to lose its grip on a vast territory that borders Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan and India, has abundant oil reserves and is China's largest natural gas-producing region.

State media tried to damp down the tension with editorials calling for calm and stories of Han and Uighur citizens helping each other during the violence. The government has not given a breakdown of the ethnicities of the dead.

History repeatedly proves that with a unified nation, and ethnic solidarity, government functions well and the economy flourishes ... but when ethnic harmony is destroyed it causes social turmoil and development is halted, the official People's Daily said in an editorial.

If a wrong is avenged with another wrong, there would be no end to it ... Blood for blood is incompatible with the rule of law and will only lead to a vicious cycle of harm and revenge, the English-language China Daily commented.

The government has blamed Sunday's killings on exiled Uighurs seeking independence, especially Rebiya Kadeer, a businesswoman and activist now living in exile in the United States.

Kadeer, writing in the Asian Wall Street Journal on Wednesday, condemned the violence on both sides and again denied being the cause of the unrest.

Uighurs, a Turkic people who are largely Muslim and share linguistic and cultural bonds with Central Asia, make up almost half of Xinjiang's 20 million people.

The population of Urumqi, which lies around 3,300 km (2,000 miles) west of Beijing, is mostly Han.

(Additional reporting by Ben Blanchard in Shanghai and Benjamin Kang Lim in Beijing; Writing by Nick Macfie and Emma Graham-Harrison; Editing by Jeremy Laurence)

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