Shopkeepers are considering pulling up stakes and leaving Machu, a once-isolated town in northwestern China that was one of the worst hit by Tibetan rioting last month.

A sense of tension and intimidation was palpable among Tibetans, Hui Muslims and Han Chinese as journalists toured the main shopping streets on Thursday. Some shops and government buildings were gutted and charred and many had broken windows.

Historically Tibetan Machu, surrounded by vast grasslands, is in one of the areas that was worst hit by famines and purges during the rule of Mao Zedong and foreigners have only been allowed to visit since 1999.

Rioting flared in the town on March 16, the weekend after riots in the capital of Tibet, Lhasa, which Tibetans attacked Hui and Han businesses and mosques.

The roads were only reopened last week.

Tibetan shopkeepers said they are repeatedly visited and interrogated by police while locals said groups of young Tibetan men, who they said may be from the neighbouring Sichuan, sometimes appeared in the late afternoon, frightening the Hui and Han shopkeepers.

"It's because they don't want us here. They want to force us to go home," said Ma Haimei, a Hui clad in a black headscarf, as a rain and snow storm rolled towards the town along the Yellow River.

She said she fled her supermarket as rioters set it on fire, while her husband was beaten outside. They have sent their two children away for safety, but have also installed a new metal gate and a worker was starting to clear the wreckage.

"I'll wait three months and then decide whether to stay. It depends whether the government is successful in restoring order."

Li Huaiquan, a Han merchant, said his wife had left for Xiahe and he planned to leave as well.

"But I have paid my rent through June and have a deposit too. So for the time being, I'll sell stuff - if it happens again, I will take the goods home quickly," said Li, who sells ethnic decorations. He was standing in a shop strewn with glass and overturned showcases.

A Tibetan businessman also said he was also planning to leave "because the atmosphere is not good".

"These widely occurring events did create a sense of public panic," Mao Shengwu, head of Gannan prefecture, which includes Machu, told reporters on Wednesday.

Fears would be calmed by "better public propaganda to the world about what happened and government policies", by strengthening security and bringing perpetrators to justice, Mao said.

FEAR FOR FUTURE

Two hours away by dirt road, monks at the Xiaxiu monastery in Manrima township said three of their colleagues, who had gone to Machu "just to see", had been detained. Two were released after paying heavy fines.

"We are very afraid. The army is all around and they come and check on us regularly. We are afraid for what these events mean for us, for the future," one monk said.

Burly men in sunglasses and Tibetan robes squatting on doorsteps at the monastery were undercover government security agents, people at the monastery said.

Tibetan shopkeepers in Machu said they were repeatedly interrogated by police, adding that three young Tibetans had been severely beaten while in custody this week.

Mao told reporters that 432 people, including 170 monks, were still in custody, and eight civilians had been formally arrested for demonstrations in most of Gannan's counties in mid-March.

Although the Chinese and foreign journalists were invited to interview people on the street in Machu, most conversations quickly ceased as government officials accompanying the tour approached. Many Tibetans said they did not speak Chinese, or answered simply "We don't know what happened here either."

"I'll wait and see. I am a bit afraid, but we'll see how it goes," said Ma Zhe, a Hui Muslim who said his fabric shop in Machu was protected because it is in a market owned by a Tibetan.

Most of the Han and Hui interviewed said they had moved to Machu within the last decade, usually from other towns in southern Gansu.

"I'm Tibetan, and I think it's really a shame for this place. We've lived through a lot here... and I never could have imagined we'd have all these buildings," said Lamajyep, a man in his 60s who spoke fluent Chinese.

"Look at this police station. It's not easy to build a strong building like this, and in a few hours it can be burnt. Isn't it a shame? But I won't discuss ethnic relations because I am not an educated man."