BEIJING - TWO people were killed and hundreds injured in eastern China when a dispute between a timber company and thousands of villagers exploded into violence, a human rights group said on Saturday.

Several thousand armed police were sent to quell Thursday's unrest in a rural part of Jiangxi province after angry villagers overwhelmed an initial police response, the Information Centre for Human Rights and Democracy said.

The state-run Beijing News confirmed the main details of the group's report, saying there were 'many' injuries, but made no mention of any deaths.

Crowds numbering several thousand in Daduan town torched offices of the timber company, battled police, and set two police vehicles on fire, said a statement from the Hong-Kong based group, which regularly issues reports on social unrest in China.

The violence was triggered on Thursday when two villagers were killed by employees hired by Lu Hai Forestry Co to guard timber lands in local Tonggu county that the company had a contract to harvest, the rights group said.

About 30 of the guards had entered Daduan on Thursday night and began attacking local villagers and officials with clubs and knives, the Beijing News said, quoting locals.

The 'several hundred' guards had been hired after the company began to suspect locals had been illegally harvesting its timber resources, it added.

Local Daduan police confirmed an incident occurred but declined further comment when contacted.

A woman at the local Tonggu county government denied there were any deaths.

'Nobody died. Twelve people were hurt but the situation is calm now,' she said, refusing to give her name.

China sees thousands of such disturbances each year as marginalised segments of society rise up against what they see as the heavy-handed practices of local governments or powerful businesses.

Several thousand armed police had been 'urgently' sent to the area to restore order, the rights group said. -- AFP