BEIJING — At least four people were killed and eight injured in what appeared to be a knife fight in the city of Korla, a center of oil production in the western Chinese region of Xinjiang, regional officials said on Friday.

The outburst of violence on Thursday put local residents on edge over a potential flare-up in ethnic tensions, a common occurrence in parts of Xinjiang where ethnic Uighur, a Turkic-speaking people, bridle at what they call discrimination by the Han Chinese, who rule China. The police ordered people to stay off the streets in parts of Korla after the fight, but the authorities had lifted that ban by Friday.

It was unclear from initial reports what led to the dispute behind the violence — whether it was mainly rooted in ethnic conflict or primarily involved other matters, like money.

The fight broke out at a video game arcade and gaming parlor early Thursday afternoon, Li Taojie, a hotel manager in Korla, said by telephone. One version of the story circulating around Korla was that a young Uighur man had lost money at the gaming center and had demanded some of it back from the manager or owner, who happened to be ethnic Han, Mr. Li said. In another version, he said, the young man successfully won a lot of money from a machine, which upset the boss.