Kazakh President Nursultan Nazarbayev on Wednesday extended until January 31 a state of emergency in the western oil city of Zhanaozen, where at least 16 people were killed last month in the nation's deadliest clashes in decades.

On December 17, Nazarbayev imposed a 20-day state of emergency and curfew in the city after a seven-month strike by oil workers over wages and sackings erupted into clashes with police. The state of emergency had been due to be lifted on January 5.

The bloodshed, on Independence Day on December 16, dealt a blow to the image of stability touted by Nazarbayev as his main achievement in the vast nation of 16.6 million, Central Asia's largest economy and oil producer.

The violence in Zhanaozen, 150 km (95 miles) from the Caspian Sea, was followed by a riot in the nearby village of Shetpe on December 17, where another person was killed. More than 100 people were wounded in the clashes.

Last week Nazarbayev sacked his billionaire son-in-law Timur Kulibayev, one of the country's richest and most influential people, as head of sovereign wealth fund Samruk-Kazyna, which manages state assets worth around $90 billion.

Nazarbayev had earlier fired the heads of state oil company KazMunaiGas and its London-listed production unit, accusing the management of failing to obey his order to resolve a labour dispute that had been simmering since May.

Nazarbayev, a 71-year-old former steelworker who has put market reforms in place and overseen foreign investment but brooks no dissent, is under international pressure to investigate the violence.

Nazarbayev's decree, published on the presidential website www.akorda.kz, gave no reason for the extension of the state of emergency, which bans strikes and public protests, restricts freedom of movement around Zhanaozen and limits access to and from the city.

Kazakhstan holds an early parliamentary election on January 15 in which Nazarbayev's ruling Nur Otan party is widely expected to win a majority of seats.

Last week, Nazarbayev forbade all government and local officials from leaving the country for holidays, saying they needed to be closer to people and to keep fingers on the pulse in the run-up to the polls.

The United States and the European Union have expressed concern about the violence in western Kazakhstan and urged authorities to conduct a transparent investigation.

Kazakh officials have said they have invited United Nations experts to join an investigation.

(Reporting by Dmitry Solovyov; Editing by Janet Lawrence)