URUMQI - A MOSQUE was closed and many businesses were shuttered on Tuesday near where police shot dead two Muslim Uighurs, as ethnic tensions simmered in China's restive Urumqi city.

Large groups of police armed with semi-automatic weapons and batons were out in force close to the scene of Monday's violence, where Chinese authorities said police shot and killed two Uighur 'lawbreakers' and injured another.

The shootings showed the capital of the northwest Xinjiang region remained a powder keg more than a week after ethnic unrest on July 5 left at least 184 people dead, despite an ongoing security clampdown.

An Algerian-based Al-Qaeda affiliate is meanwhile calling for reprisals against Chinese workers in northern Africa, the South China Morning Post said Tuesday, citing an intelligence report.

The call came from Algerian-based Al-Qaeda in the Islamic Maghreb (AQIM), the Post said, quoting the report by London-based risk analysis firm Stirling Assynt.

It is the first time Osama bin Laden's network has directly threatened China or its interests, the Stirling report noted, and said that a thirst for vengeance was spreading among the global jihadist community.

The latest shooting was the first time the government said security forces had killed anyone since the unrest broke out, despite claims by exiled Uighurs that many people had died in the clampdown.

The initial unrest of July 5 saw Uighurs attack Han Chinese, according to the government and witnesses interviewed by AFP, in the worst ethnic violence to hit the country in decades.

Thousands of Han Chinese retaliated in the following days, arming themselves with makeshift weapons and marching through parts of Urumqi vowing vengeance against the Uighurs.

Before Monday's shootings, security forces had worked hard to regain control of the city, and many shops outside the Uighur district had reopened and traffic had returned to the streets. -- AFP