By Benjamin Kang Lim

BEIJING, Nov 25 (Reuters) - An altercation between a Han Chinese 
shopowner and Tibetan monks in rural Tibet escalated into an ethnic 
riot, a source with knowledge of the incident said on Sunday, the 
latest sign of discontent in the unsettled region.

The riot began after three Buddhist monks from the Baiga temple in 
Tibet's Naqu district got into a scuffle with the shopowner. When 
police arrested the monks, but not the shopowner, anger flared.

"The Han owner, he attacked the monks first," the Beijing-based 
source, familiar with Tibetan affairs, said of the incident which 
happened last week.

The monks were taken from the local police station to the county 
Public Security Bureau, where they claimed they were beaten.

Hundreds of herdsmen went to the bureau to demand their release, and 
when their demands went unmet, they began smashing shops owned by Han 
Chinese.

The estimated 600 herdsmen also attacked the police who initially 
arrested the monks and smashed cars and government offices.

When police began filming the riot to collect evidence, it further 
angered the crowds.

"The herdsmen were very agitated and they wouldn't let police film 
them," the source said.

The riot forced authorities to call in 800 paramilitaries, seal off 
the area and cut telephone links.

An official reached by telephone at the Public Security Bureau in 
Biru county, which overseas Baiga village where the incident began, 
acknowledged that there had been unrest but gave no further information.

"This is confidential. I can't talk about this," said the official, 
who hung up when asked his name. He said the situation was now stable.

The riot was the most recent of a string of incidents in Tibet, where 
tensions between Chinese and Tibetans remain high, nearly five 
decades after Communist troops took control of the isolated, 
mountainous region.

Many in Tibet still pledge loyalty to the Dalai Lama, the spiritual 
leader of Tibetan Buddhism, despite Beijing's condemnation of him as 
a traitor for staging a failed uprising against Chinese rule and 
fleeing to India in 1959.

Naqu district was birthplace of a young nun who was killed last year 
when Chinese soldiers fired at a group of Tibetans as they attempted 
to cross a mountain pass into Nepal.

Several in the same area were also arrested last year for burning 
furs after the Dalai Lama called on Tibetans not to wear the furs and 
skins of endangered animals.