A series of photographs posted on the internet claiming to be of the incident showed a man in a white shirt and dark trousers holding a machete while surrounded by several police officers. Internet postings claimed the two victims were killed, but some witnesses rejected those claims.

Police declined to comment and the Huaxi hospital, where the victims were taken, could not be reached.

By late afternoon, most police and vehicles had withdrawn after blocking off the street.

Yesterday, a combined force of police, riot police and soldiers continued to patrol the city's main square and blocked vehicles from the Tibetan quarter.

A source close to the police confirmed that officers had been on high alert for the past 72 hours, some not even returning home for the past few days.

Chengdu is also believed to be reinforcing forces in Tibet, with a convoy of hundreds of trucks carrying soldiers sighted by witnesses on the major road linking Sichuan to the western region early on Monday morning.

One rumour circulating on the internet concerns a shipment of missing explosives, sparking fears of potential bombings. A spokeswoman for the Sichuan provincial government said she was unaware of such a threat.

'Although there are a lot of rumours, we can't check everything,' she said. 'People's lives are unaffected. People go to work and school normally and the shops are still open.'

Whether it is true or not, some residents are avoiding crowded public places.

'My mother told me not to ride the public bus,' a young woman said.