President Hu Jintao abandoned a Group of Eight summit in Italy, in what observers said was an unprecedented move, to tackle one of China's worst spikes in ethnic tensions in decades.

In Urumqi, the capital of the remote northwest Xinjiang region where 156 people died in unrest on Sunday, army helicopters circled overhead as thousands of soldiers and riot police filled the city shouting out "protect the people".

"We support this," said a 45-year-old Han Chinese as he watched the troops roll by in trucks.

"But they should have got here sooner. It took them three days to do this. Why so long?"

After authorities blamed Muslim Uighurs for Sunday's unrest that also left more than 1,000 people injured, Han Chinese took to the streets Tuesday with shovels, meat cleavers and other makeshift weapons vowing to defend themselves.

After a night-time curfew was declared on Tuesday, Chinese authorities appeared determined to show they were able to maintain order.

Thousands of riot police wearing helmets and carrying shields lined up on a main road in Urumqi dividing the city centre from a Uighur district, with columns of soldiers behind them.

The security build-up had an impact with fewer people wielding weapons taking to the streets, and Urumqi mayor Jerla Isamudin told reporters in the late afternoon that the situation in the city was "under control".

He also warned that anyone found guilty of murder in connection to the unrest would be given the death penalty.

Official news agency Xinhua said late Wednesday that the city "appeared to be calm" but added "sporadic standoffs and clashes were still reported."

Tensions remained high, with some Han Chinese and Uighurs continuing to arm themselves with sticks, poles, knives and other weapons, leading to confrontations and violence, according to AFP reporters.

In one of two attacks witnessed by AFP reporters, about 20 Han Chinese men armed with wooden bats attacked a Uighur man in central Urumqi.

The beating stopped after about one minute when security forces moved in to disperse the mob, the AFP reporter said, while a local Han Chinese woman said the victim was a Uighur man.

The extent of the man's injuries was unclear, as he was quickly taken away.

In the second incident, a group of Han Chinese saw three Uighurs at an intersection and chased them.

Two of the Uighurs escaped, but a third was caught by some of the crowd and he was assaulted for around 30 seconds, before police took him away. AFP reporters said he had blood on his face after the beating.

In another incident, about 200 Uighurs armed with sticks, pipes and rocks began protesting directly in front of a police cordon that was dividing their neighbourhood from a Han-populated area, an AFP reporter witnessed.

The crowd of Uighurs grew after a helicopter dropped leaflets blaming Sunday's unrest on exiled Uighur leader Rebiya Kadeer, but they also claimed police had overnight allowed Han Chinese to freely attack Muslim areas.

In a BBC interview on Wednesday, Kadeer blamed Chinese policies for the violent unrest and claimed the death toll from riots was "much higher" than the 156 stated by Beijing.

Xinhua late Wednesday reported government sources as saying they had evidence the riot was "instigated and masterminded" by Kadeer, citing "recordings of calls" which referred to unrest ahead of the rioting.

China's state media said Wednesday over 100 people "killed by rioters" in the initial violence had been identified, providing the first partial breakdown of the death toll.

Highlighting the severity of the crisis, the government announced President Hu had cut short his trip to Italy for the G8 summit.

"I have never seen a Chinese president shorten a trip abroad before... there is clear concern," said Jean-Pierre Cabestan, professor of political science at Hong Kong Baptist University.

Xinjiang's eight million Uighurs make up nearly half the population of the region, a vast area of deserts and mountains rich in natural resources that borders Central Asia.

The Turkic-speaking people have long complained of repression and discrimination under Chinese rule, but Beijing insists it has brought economic prosperity to the region.

related report
Australia hits out as China holds Rio Tinto man for spying
Australia said China's detention of a Rio Tinto employee accused of spying was "completely unacceptable" Wednesday and it was seeking urgent access to the executive in Shanghai.

Foreign Minister Stephen Smith expressed astonishment at Australian Stern Hu's detention with three other Rio executives on Sunday, saying there was no evidence linking the allegations to the mining giant's activities in China.

"It came as a surprise to our officials in the Australian government, as it came as a surprise to Rio Tinto," he said

Australian officials were in the dark about the reason for Hu's detention until the Chinese government informed them Wednesday, three days after he was picked up.

"This afternoon Australian officials were advised that the reason for Mr Hu's detention was that he was being detained on the suspicion of espionage and stealing state secrets," Smith told reporters.

Smith said consular officials were seeking access to Hu, an Australian citizen and a long-time Rio employee based in Shanghai. They were in contact with Hu's wife, also an Australian citizen and resident in the Chinese city.

"This is a matter of very real concern and it is completely unacceptable," Smith said.

China's foreign ministry declined immediate reaction.

The diplomatic crisis blew up amid tense negotiations between Rio Tinto and China over iron ore contracts and comes after the mining giant angered Beijing by snubbing a 19.5 billion US dollar cash injection from state-owned Chinalco,

Australian reports said Hu and the other employees, believed to be Chinese nationals, formed part of Rio's iron ore team.

Australian media reported speculation that the detentions were linked to alleged manipulation of the iron ore market, while Chinese media have accused Rio of withholding product from the spot market to drive up prices.

The state-controlled Securities Times quoted unnamed "industry insiders" as speculating the detentions may have been over suspected involvement in business bribery.

"We are not aware of any evidence that would support such an investigation," a Rio Tinto spokeswoman told Dow Jones Newswires when questioned about the allegations.

One Australian politician, who had strongly criticised the Chinalco deal, said the incident showed the dangers of doing business with the Asian giant.

"This should be a sobering wake-up call for all Australians," said opposition senator Barnaby Joyce.

Joyce said he believed Hu's detention was linked to the Chinalco deal's collapse.

"Chinalco's failure to buy 18 percent ownership of Rio would appear to have inspired Mr Hu's arrest and that of three other Rio workers," he said.

Debt-laden Rio Tinto dumped the 19.5 billion dollar Chinalco proposal in favour of a huge rights issue and joint venture with BHP Billiton.

The Chinalco deal had provoked intense debate in Australia, with many politicians and commentators voicing concern over China's march into the lucrative resources sector.

After the deal soured, Beijing threatened to undertake an anti-monopoly review of the BHP-Rio joint venture while official Chinese media put its failure down to Australian "prejudice".

Rio has also spearheaded tough Australian negotiations with China over this year's benchmark price for iron ore contracts, which missed a key deadline last week.

China, the world's biggest iron ore consumer, has been seeking a deeper cut than the 33 percent negotiated with Japan and South Korea, while Rio says its customers are welcome to buy at spot prices.

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