The protests, led by Buddhist monks, began Monday, the anniversary of a failed Tibetan uprising against Chinese rule in 1959, and have gained momentum throughout the week. They are the largest in Tibet since the late 1980s, when Chinese authorities cracked down on the region to restore order, the New York Times reported.
The anti-Chinese protesters have burned vehicles and shops in the city's main shopping district, with many targeting Chinese-owned businesses.
"It was chaos everywhere. I could see fires, smoke, cars and motorcycles burning," a Tibetan guide, who spoke anonymously fearing retribution, told the Associated Press. He said the whole road in the main Barkor shopping area surrounding the Jokhang temple "seemed to be on fire."
According to U.S. government funded Radio Free Asia, witnesses reported seeing two bodies lying on the ground in the Barkor area, a shopping district in the old city and the area where the protests are focused.
The Dalai Lama, the exiled Tibetan Buddhist leader living in India, called on China to show restraint against the demonstrators and to "address the long-simmering resentments of the Tibetan people through dialogue with the Tibetan people. I also urge my fellow Tibetans not to resort to violence," his statement read.
China had earlier accused the Dalai Lama of acting as the "mastermind" behind protests that rocked the region.
"This is absolutely baseless and his holiness has made his stand very clear," a spokesman for the Dalai Lama, contacted in the Indian town of Dharamsala told Reuters by telephone.
The week's protests were started Buddhist monks in a rare show of defiance, but were soon joined by large numbers of ordinary Tibetans.
Initially the protesters were calling for the release of other monks who had been detained last fall but eventually the crowds made political demands, including a call for Tibet's independence.
Witnesses reported seeing protesters unfurling the Tibetan flag, a crime punishable by death.
China invaded Tibet in 1950 and has employed strict rule there ever since, controlling religious institutions and limiting expression of Tibetan culture. The region is also rich in natural resources such as timber and minerals -- materials that are used to feed China's growing economy.
The White House, while not directly criticizing the Chinese government, also urged restraint.
"We believe Beijing needs to respect Tibetan culture, needs to respect multi-ethnicity in their society," spokesman Tony Fratto said while traveling with President Bush. "We regret the tensions between ethnic groups and Beijing."
The protests come as the Communist Party is holding its annual meeting of the National People's Congress in Beijing. In addition, the country is under increased international scrutiny in the months before it hosts this summer's Olympic Games.