At least 140 people have been killed in rioting in the capital of China's northwestern region of Xinjiang, with the government blaming exiled separatists for the Muslim area's worst case of unrest in years.

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Hundreds of rioters have been arrested, the official Xinhua news agency reported, after rock-throwing Uighurs took to the streets of the regional capital yesterday, some burning and smashing vehicles and confronting ranks of anti-riot police.

The unrest underscores the volatile ethnic tensions that have accompanied China's growing economic and political stake in its western frontiers.

But independent analysts said the trouble in the resource-rich region was unlikely to have a major impact on China's economy because of the remoteness of the area and limited access.

Beijing's image as a responsible power, though, may take a hit.

"In terms of China's domestic economy, it is in a remote place and it does not have a big impact on things generally unless there is some evidence, of which there is none, that the government is in some meaningful way losing control," said Arthur Kroeber, Managing Director of Dragonomics, a research and advisory firm in Beijing.

A senior Chinese government official said the unrest was the work of extremist forces abroad, signalling a security crackdown in the strategic region near Pakistan and central Asia.

Residents in the Xinjiang's regional capital Urumqi were unable to access the Internet on Monday, several said. "The city is basically under martial law," Yang Jin, a dried fruit merchant, said by telephone.

Chinese state television showed rioters throwing rocks at police and overturning a police car, and smoke billowing from burning vehicles.

Li Zhi, the Communist Party boss of Urumqi told a news conference that the death toll from the rioting had risen to 140, the semi-official China News Agency said. Xinhua said 816 people were injured and hospitalised.

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Police rounded up "several hundred" who participated in the violence, including more than 10 key players who fanned unrest, Xinhua said, and are searching for 90 others.

"For whoever was behind the riot, or for whatever intentions they had in masterminding the bloodshed, one thing is clear: under no circumstances should slaughters be brooked, violence allowed or national security challenged," according to a Xinhua commentary.

The riot in Urumqi, a city of 2.3 million residents 3,270 km (2,050 miles) west of Beijing, followed a protest against government handling of a June clash between Han Chinese and Uighur factory workers in southern China, where two Uighurs died in Shaoguan.

The China Daily put the number of protesters at 300 to 500 while the exiled Uyghur American Association had it as high as 3,000.

An unnamed Chinese official said the "unrest was masterminded by the World Uyghur Congress led by Rebiya Kadeer", according to Xinhua. "This was a crime of violence that was pre-meditated and organised," said the report.

Rebiya Kadeer is a Uighur businesswoman now in exile in the United States after years in jail, and accused of separatist activities. She did not answer calls for comment.

But exiled Uighur groups adamantly rejected the Chinese government claim of a plot. They said the riot was an outpouring of pent-up anger over government policies and Han Chinese dominance of economic opportunities.

"They're blaming us as a way to distract the Uighurs' attention from the discrimination and oppression that sparked this protest," said Dilxat Raxit, a spokesman for the World Uyghur Congress in exile in Sweden.

Xinjiang is the doorway to China's trade and energy ties with central Asia, and is itself rich in gas, minerals and farm produce. But many Uighurs say they see little of that wealth.

"In Xinjiang one of the major sources of discontent is that there is still a major gap economically between Han and Uighurs," said Barry Sautman, a specialist on China's ethnic politics at the Hong Kong University of Science and Technology.

Almost half of Xinjiang's 20 million people are Uighurs. The population of Urumqi is mostly Han Chinese, and the city is under tight police security even in normal times.

"I personally saw several Han people being stabbed. Many people on buses were scared witless," Zhang Wanxin, a Urumqi resident, said by telephone.