BEIJING (Reuters) - Police and troops locked down the capital of Tibet on Sunday as tension remained high, two days after ugly street protests against Chinese rule that the contested region’s government-in-exile said had killed 80 people.

“We don’t dare go out, not for anything. There’s too much trouble,” said a Tibetan businesswoman by telephone from Lhasa, a remote city high in the Himalayas out of bounds to foreign journalists without official permission.

Like other residents contacted, she spoke only briefly and anonymously out of fear of punishment in a city that last week saw its most serious rioting and shooting in nearly two decades.

The convulsion of Tibetan anger at the Chinese presence in the region came after days of peaceful protests by monks and was a sharp blow to Beijing’s preparations for the Olympic Games in August, when China wants to showcase prosperity and unity.

Tibet is one of several potential flashpoints for the ruling Communist party at a time of heightened attention on China.

The government is concerned about the effect of inflation and wealth gaps on social stability after years of breakneck economic growth, and this month it said it had foiled two terrorist plots hatched by the largely Muslim Uighur minority in the northwestern region of Xinjiang, including an attempt to disrupt the Olympics.

It has declared a “people’s war” of security and propaganda against support for the Dalai Lama, the spiritual leader of Tibetan Buddhists, underlining that it will not heed calls from around the globe for a lenient response to the riots.

U.S. Secretary of State Condoleezza Rice voiced concern in a statement on Saturday that violence appeared to be continuing, and she urged Beijing to “release monks and others who have been detained solely for the peaceful expression of their views”.

India called for dialogue and non-violent means. Home to the Dalai Lama, who is reviled by Beijing, India treads a delicate balance with its giant neighbor to expand diplomatic and trade ties after decades of rivalry that included a brief war in 1962.

A woman in contact with a businessman in Lhasa said the streets were teeming with armed police in riot gear on Sunday after word of renewed clashes overnight, when Hui Muslim Chinese attacked Tibetans in revenge for wrecked homes and property.

“The Tibetans were starting to fight back but then the troops stepped in and restored order,” she said.

The report of fresh fighting could not be verified.

A 19-year-old tourist from the United States, Chelsea Hockett, who arrived on a flight from Lhasa, told Reuters in Chengdu there had been “a lot of shooting”.

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“No one can leave the hotels. It was really bad,” she said.

The self-proclaimed Tibetan government-in-exile in northern India said 80 people had died in the clashes and 72 were hurt.

But the Xinhua news agency said at least 10 “innocent civilians” died, mostly in fires lit by rioters, and 12 policemen were seriously injured.

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It was not clear if anyone had been shot dead.

“The protesters were barbarous and violent,” the official news agency quoted a tourist surnamed Dong as saying. “They ganged up on the young police officers and beat innocent people.”

SECURITY SWEEP

Monks first took to the streets of Tibet last Monday to mark the 49th anniversary of an earlier uprising, and protests soon spread to adjoining regions inhabited by pockets of Tibetans.

In Lhasa on Friday, protesters, some in monks’ robes and some yelling independence slogans, torched vehicles, attacked banks and offices and used stones and knives against police.

Chinese authorities have now signaled a sweeping campaign to redouble security in the region and attack public support for the Dalai Lama, who fled over the Himalayas into exile in 1959 after the failed uprising that year.

“Fight a people’s war to oppose separatism and protect stability ... expose and condemn the malicious actions of these forces and expose the hideous face of the Dalai clique to broad daylight,” senior regional and security officials announced after a meeting, according to the official Tibet Daily on Sunday.

Security officials, speaking to Reuters on the sidelines of China’s annual session of parliament in Beijing, defended the Tibet crackdown and said there was no call for alarm.

“Having some problems crop up is nothing to make a big deal out of. We just need to deal with them in an appropriate manner,” said senior army General Zhang Wentai. “It won’t affect the Olympics, or the country’s overall security.”