Police said the false claim sparked a vicious brawl between Han and Uighur ethnic groups at a factory. Two Uighurs were killed and 118 people were injured.
BBC sources in China report they have been unable to open the Twitter messaging site in Shanghai and that message boards on Xinjiang on a number of websites were not taking posts.
Reports from Xinjiang suggest some internet and mobile phone services have been blocked.
Analysts say the government's so-called Great Firewall of China, which it uses to block unwanted internet material, will prevent large-scale dissemination of information but that dedicated internet users can bypass it fairly easily.
BBC China editor Shirong Chen says there has been ethnic tension in Xinjiang since before the founding of the People's Republic.
Some of its Uighur population of about eight million want to break away from China and its majority Han Chinese population.
The authorities say police are securing order across the region and anyone creating a disturbance will be detained and punished.
However, our China editor says there may be questions asked about their inability to prevent a protest they knew about days in advance.
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