Updated

Protesters were holding four people hostage Friday, accusing them of participating in the fatal shooting of a demonstrator the night before in this historic state capital reeling from escalating political violence.

Also Friday, authorities arrested a top teachers' union leader believed to be the driving force behind the demonstrations that have besieged the city of Oaxaca since June in a bid to oust the Oaxaca state governor.

CountryWatch: Mexico

The U.S. Embassy, meanwhile, warned U.S. citizens to steer clear of the protests, citing the possibility of further violence in the city popular with tourists for its cobbled streets, markets and cuisine.

Protest organizer Enrique Rueda Pacheco told The Associated Press that police detained teachers' union leader Erangelio Mendoza Gonzalez on federal charges of blocking public access and taking over city buses. Federal authorities confirmed the arrest but did not provide details.

Meanwhile, state spokesman Miguel Angel Concha Viloria said demonstrators were holding four people at a local TV station they have seized.

The protesters accused the four of involvement in the killing of 50-year-old mechanic Jose Jimenez, who was shot in the heart late Thursday during a march of 8,000 people calling for the resignation of Oaxaca state Gov. Ulises Ruiz.

The leftist Oaxaca People's Assembly, which organized the march, alleged Ruiz was behind the shooting — a charge denied by officials in the governor's office. The assembly is demanding Ruiz resign, accusing him of using force to repress dissent and rigging the 2004 election to win office.

Ruiz on Friday condemned the violence. The governor is a member of the Institutional Revolutionary Party, or PRI, which ruled Mexico for 71 years until President Vicente Fox's election in 2000.

In recent weeks, protesters have captured several men accused of attacking demonstrators and handed to them over to federal investigators.

The slain protester's wife, Clara Jimenez, said the gunfire appeared to come from a house that the marchers passed.

State prosecutor Lizbeth Cana said initial investigations revealed the protester had argued with the owners of the house after urinating in their yard. After the shooting, protesters set fire to the house.

Cana also showed reporters a video showing Dr. Soledad Angela Rivera Torres, who says she owned the burned house and owns a medical clinic opposite it where the Jimenez's body was taken. Rivera tearfully said the four people taken hostage were her father, grandmother, and two brothers.

She said the four had gone out to the street during the commotion and were seized and beaten by masked assembly members, who accused them of being behind the shooting. The protesters later burned the family's cars and clinic vehicles, she said.

"They told us because we have a lot of money, we deserved what was happening to us," she said.

About 80 teachers and other demonstrators paid homage to Jose Jimenez outside the clinic on Friday, singing "We shall overcome." About 300 protesters held a funeral ceremony for him later in the central square, draping a Mexican flag over his coffin.

In other parts of the city, masked demonstrators armed with sticks and machetes commandeered city buses after ordering passengers off.

The U.S. Embassy in Mexico City on Friday issued a warning advising U.S. citizens not to go near demonstrations in Oaxaca.

"The possibility for violence continues and the situation remains tense," the embassy warning said. "Vandalism, arrests, and injuries continue to result from the ongoing confrontations."

Protesters have commandeered 35 buses since sustained protests broke out in Oaxaca in June, after police attacked teachers striking for a pay raise.

More than 2,000 protesters have camped out in the city center, building barricades, smashing windows and stealing government vehicles. Armed assailants have shot at a radio station and a newspaper that support the protests, injuring one reporter. Police are nowhere to be seen in the downtown.

On Wednesday, two men and a 12-year-old boy headed to join the camps were shot dead on a road about 150 miles from the city, but it was unclear if that killing was connected to the protests.

Mexico's most famous living painter, Franciso Toledo, who lives in Oaxaca, said he would close three cultural centers for fears protesters could break in and damage the artwork.

Business groups say the conflict has caused losses of more than $50 million.