'Troops have been marching all morning'
Thousands of security forces have been deployed in the city of Urumqi in China's Xinjiang region to try to end deadly ethnic clashes.
Chinese President Hu Jintao has cut short his visit to Italy for the G8 summit to deal with the crisis.
The unrest between Muslim Uighurs and Han Chinese began on Sunday and has left 156 people dead.
The Communist party boss in Urumqi has said those found guilty of murder will be put to death.
More than 1,400 people have been arrested over the violence.
Return to Beijing
The BBC's Quentin Sommerville, reporting from Urumqi's Uighur neighbourhood, says there are thousands of paramilitary police in the city in a situation he says is virtually martial law.
AT THE SCENE: 8 JULY
Quentin Sommerville, BBC News, Urumqi
Here in Urumqi's Uighur Muslim neighbourhood, just on the edge, many hundreds of paramilitary police are on the move. They are seeking to separate this mainly Muslim part of the city from Han Chinese.
Riot police are all around with shields, helmets, some are carrying semi-automatic weapons, others have clubs. They are lining up across the streets to separate these two sides.
We haven't seen any violence yet, we did see some Han Chinese running with batons, they were chased down a side street but this is massive deployment of troops on a scale this city hasn't seen in a very, very long time. It feels like martial law in everything but name.
Our correspondent says the situation is still tense, with rumours and counter-rumours of ethnic attacks.
Li Zhi, the Communist chief in Urumqi, said the government would execute those found guilty of killings during the riots.
The AFP news agency also quoted the mayor of Urumqi, Jerla Isamudin, as saying the situation was now "under control".
However, there were earlier reports of fresh scuffles as police tried to arrest protesters.
Reuters news agency said crowds of Han Chinese were volatile and growing. Some were angry that police were arresting young Han men.
AFP reporters also said they had seen fresh violence on Wednesday, including one attack on a Uighur man by Han Chinese.
They said the man was beaten and kicked by about six people as dozens of Han Chinese yelled encouragement, before police moved in to end the attack.
President Hu was expected to join G8 talks taking place in Rome on Thursday.
Instead he flew home from an airport in Pisa, leaving officials to represent China at the G8 summit. He arrived back in Beijing on Wednesday, China's official news agency Xinhua said.
A state visit to Portugal has been postponed.
Our correspondent says the authorities in Xinjiang have been told they have to sort the crisis out as soon as possible amid the embarrassment of Mr Hu having to cancel his G8 attendance.
But he says it is very unlikely there will be any shift in China's policy in Xinjiang, just as it did not change in Tibet after unrest there last year.
On Tuesday, riot police fired tear gas to break up groups of Han Chinese armed with clubs, who said they were angry at violence carried out by Uighurs in the north-western province.
Early in the day, Uighur women had rallied against the arrest of family members, saying hundreds of their men had been detained arbitrarily in a massive police sweep through Urumqi's Uighur districts.
Later hundreds of Han Chinese marched through the streets of Urumqi smashing shops and stalls belonging to Uighurs.
Our correspondent says some of the protesters were shouting "down with Uighurs" as they rampaged through the streets armed with homemade weapons.
Officials say 156 people - mostly Han Chinese - died in Sunday's violence. Uighur groups say many more have died, claiming 90% of the dead were Uighurs.
One official described Sunday's unrest as the "deadliest riot since New China was founded in 1949".
The unrest erupted when Uighur protesters attacked vehicles before turning on local Han Chinese and battling security forces.
They had initially been protesting over a brawl between Uighurs and Han Chinese several weeks earlier in a toy factory thousands of miles away in Guangdong province.
China's authorities have repeatedly claimed that exiled Uighur leader Rebiya Kadeer is stirring up trouble in the region. But she told the BBC she was not responsible for any of the violence.
Tensions have been growing in Xinjiang for many years, as Han Chinese migrants have poured into the region, where the Uighur minority is concentrated.
Many Uighurs feel economic growth has bypassed them and complain of discrimination and diminished opportunities.
Some Uighurs support the notion of an independent state and there have been a number of bombings and some attacks on security forces.
Chinese authorities say the Xinjiang separatists are terrorists with links to al-Qaeda and receive support from outside the country.
Campaigners accuse China of exaggerating the threat to justify tough security clampdowns in the region.
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