Chile's government extended a state of emergency to several cities across the country, after a weekend of violent clashes, looting and arson attacks.

Five people were reported to have died on Sunday, after looters set a factory ablaze in a northern suburb of Santiago, the country's capital city. It brings the death toll from violent protests to at least seven, Chile's interior minister said Sunday.

A proposed hike in public transport fares, which has now been suspended, sparked nationwide protests last week. The demonstrations have since widened to reflect public anger at rising living costs and income inequality in one of Latin America's wealthiest countries.

The military and police used tear gas and a water cannon against protesters over the weekend, with a night-time curfew also placed on residents in major cities.

"We are at war against a powerful enemy, who is willing to use violence without limits," President Sebastian Pinera said during a televised statement on Sunday, according to Reuters.

Pinera also said that the state of emergency he declared in Santiago on Saturday would be extended to cities in the north and south of the country.

It marks the first time since Chile returned to democracy in 1990 that the government has declared a state of emergency because of civil unrest in the capital.

"There's a feeling that democracy or the current government isn't delivering for ordinary people," Mark Keller, a Latin America analyst at the Economist Intelligence Unit (EIU), told CNBC via email on Monday.

Chile is famously known as Latin America's most stable and business-friendly economy, Keller said, but there is a sense that economic growth has failed to improve the lives of the majority of its citizens.

"These latest protests are the latest manifestations of that ongoing discontent. The fact that the protests spread beyond Santiago quickly show there's deep underlying discontent nationwide."