Chile's president and interior minister are flying to the scene of a fatal land dispute between Mapuche Indians and a wealthy landowning couple who died last night defending their property from attack.

Police say 75-year-old Werner Luchsinger and his wife Vivian McKay burned to death as their house was set on fire.

Police chief Ivan Bezmalinovic says the landowner fired a weapon in self-defense and hit one of the Indians in the neck. Celestino Cordova Transito has been arrested..

The victim's cousin Jorge Luchsinger said McKay called relatives for help during the attack, but when they arrived the house was already burning and she didn't answer her phone.

Interior Minister Andres Chadwick called it a terrorist act that will be severely punished.