China on Saturday blamed a deadly confrontation between authorities and demonstrators in a village near Hong Kong on "a few instigators" who organized an attack on a wind power plant, prompting police to open fire.

China said in its first official comments on Tuesday's confrontation that three villagers were killed. Residents, however, said as many as 20 people were killed.

The state-run Xinhua News Agency said police opened fire on villagers in Dongzhou, a village in Guangdong province, after a mob formed a blockade on the road and began throwing explosives at officers. Three villagers were killed and eight were wounded, Xinhua said, quoting the Information Office of the neighboring city of Shanwei.

However, residents told The Associated Press that as many as 20 people were killed when police opened fire on a crowd of thousands protesting against inadequate compensation offered by the government for land to be used for the new power plant. Villagers said dozens of people were missing.

A Hong Kong newspaper quoted villagers accusing Chinese officials of trying to cover up the killings.

It was the deadliest known use of force by Chinese authorities against civilians since security troops opened fire on pro-democracy demonstrators at Beijing's Tiananmen Square in 1989, killing hundreds and perhaps thousands. Although police often use tear gas and truncheons to disperse demonstrators, it is extremely rare for them to fire into a crowd.

The clash in Dongzhou also marked an escalation in social protests that have convulsed the Chinese countryside over land seizures for factories, power plants, shopping malls and other projects. Farmers often say they are paid too little and some accuse officials of stealing compensation money.

Authorities called the assault by villagers "a serious violation of the law" and said a special group was formed to investigate the incident, Xinhua said.

Before the fatal attack, police used tear gas to break up a mob of about 170 villagers armed with knives, steel spears, sticks and explosives, Xinhua said. Two villagers were arrested.

The report said the instigators then formed a mob of 300 villagers to blockade a road leading to a neighboring village to force police to release the suspects. Police opened fire after the villagers began to throw explosives at police and one of the instigators threatened to blow up the power plant, Xinhua said.

Hong Kong's South China Morning Post newspaper Saturday quoted Dongzhou villagers as saying authorities were trying to cover up the killings by offering families money to give up the bodies of the dead.

"They offered us a sum but said we would have to give up the body," an unidentified relative of one slain villager, 31-year-old Wei Jin, was quoted as saying. "We are not going to agree."

Hong Kong reverted to Chinese control in 1997, but the former British colony maintains a high degree of press freedom. Its proximity to Dongzhou gives local reporters good access to events there.

One woman in the village told The Associated Press by telephone that police were holding some bodies of dead protesters and refusing relatives' pleas to give them back.

Another villager, who identified himself only by his last name, Chong, said many of the victims' families had gone to a local police station seeking compensation for the deaths but had been turned away.

None of the villagers wanted to be identified, fearing official retaliation.

Residents said they remained under siege, with authorities surrounding the village and refusing to let anyone leave. On Friday, residents said troops armed with guns and shields were searching for the protest organizers.

Before Saturday's report, state media had not mentioned the incident in Dongzhou and both provincial and local governments repeatedly refused to comment. Telephone calls to the local police station went unanswered.

Protests by farmers -- the ruling party's historical base -- are an extremely sensitive issue in China.

The number of protests in China's vast, poverty-stricken countryside -- home to about 800 million people -- has risen in recent months as anger comes to a head over land seizures, corruption and a yawning wealth gap that experts say now threatens social stability.

The government says about 70,000 such confrontations between officials and rural residents occurred last year, although many more are believed to go unreported. The clashes also have become increasingly violent, with injuries sustained on both sides and huge amounts of damage done to property.

Alarmed by such conflicts, President Hu Jintao's government has made a priority of easing rural poverty, promising to spread prosperity to areas left behind by China's economic boom. But in many regions, families still get by on the equivalent of a few hundred dollars a year.

Dongzhou is on the outskirts of the city of Shanwei. Like many cities in China, Shanwei has cleared suburban land once used for farming to build industrial zones. State media have said the Shanwei Red Bay industrial zone is slated to have three electricity-generating plants -- a coal-fired plant, a wave power plant and a wind farm.

Shanwei already has a large wind farm on an offshore island, with 25 turbines. Another 24 are set for construction.

Earlier reports said the building of the $743 million coal-fired power plant, a major government-invested project for the province, also was disrupted by a dispute over land compensation.