The incident occurred Tuesday more than 150 kilometres (90 miles) south of Hanoi on land designated for the Nghi Son oil refinery.

Land disputes and complaints that residents have been cheated out of compensation have become the most common cause of protests in Vietnam, a mainly rural country that is rapidly industrialising.

In the latest incident, women, children and the elderly had been among those demonstrating peacefully for three days to protest "unfair" compensation they had received for their land, a 68-year-old retired government worker said.

He blamed police for the death in Tuesday's clashes, explaining that he had covered the boy's face with a cloth as residents carried the body home.

"I could not say whether he was shot or beaten to death. But I can confirm that he was killed during a clash, and he was killed because of the police," said the retired government worker, who declined to be named.

A groundbreaking ceremony occurred two years ago for the 6.2-billion-dollar refinery, a joint venture between state-owned Vietnam Oil and Gas Corp (PetroVietnam), Japan's Idemitsu Kosan Co and Mitsui Chemicals Inc, and Kuwait Petroleum International.

The refinery, the country's second, was due to be operational by 2013, officials said at the time, although it was not clear how far construction had got.

On Tuesday evening angry residents descended on the home of the local government's chairman, causing damage inside the house and burning two motorcycles, the 68-year-old said.

Local government officials were not immediately available for comment. District police confirmed that an incident had occurred Tuesday but gave no details. "This case is under investigation," an officer said.

A 60-year-old woman cited witnesses from her family as saying that a policeman had shot the child in the stomach, wounded a woman's hand and shot a man in the head. The boy was reportedly 12 years old.

The wounded man was in critical condition, according to an administrator at the main hospital in the northern province of Thanh Hoa.

The Dan Tri online news site quoted the province's head of public security, Dong Dai Loc, as saying one person had died and two were wounded in the clashes.

The 68-year-old retired government worker said: "They did not do anything wrong. They remained calm, while there had always been hundreds of police, uniformed and plainclothes, watching them."

The online news site printed what it said was a police statement about the incident. It said some people threw bricks and stones at police, who fired a warning before "extremists" tried to take the police gun. The statement did not clarify who fired the fatal shot.

The retired government worker said things were quiet on Wednesday after local officials went into hiding but tensions could flare again "if the authorities do not deal with the situation properly".

Agence France Presse - May 26, 2010