Police shot dead one person, the Changsha Evening News reported on its Twitter-like Sina Weibo microblog. Unverified photos circulating online showed several bodies on the street and police taking a suspect into custody.
One suspect in the incident worked as a bread vendor and was involved in an argument with a customer, traffic radio in Hunan province said on its official weibo microblog, citing the Changsha police.
The official Xinhua news agency said police had cordoned off the site near a food market and primary school in a north Changsha neighbourhood. Further details where not immediately available.
China is still jittery after a mass stabbing at a Chinese train station in the southwestern city of Kunming two weeks ago in which 29 people were killed and about 140 wounded.
Beijing has not explicitly accused Uighurs of carrying out the Kunming attack, but by calling the perpetrators Xinjiang extremists the implication is clear.
Many Uighurs say they are infuriated by Chinese curbs on their culture and religion, although the government says they are given wide freedoms.
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