"Heavy casualties reported in terror attack in Xinjiang," Xinhua news agency reported.
More details are awaited, it said.
Xinjiang, home to Uighur Muslims, is in turmoil over the increasing settlements of Han Chinese from other parts of the country. The violence has now spread to other part of China.
Uighurs are a Turkic speaking Muslims with ethnic fraternity in Turkey, bordering Syria.
Beijing accuses al-Qaeda backed East Turkestan Islamic Movement (ETIM), which had bases in Pakistan's tribal areas.
Chinese security forces launched an-year-long crackdown against the militants after a spate of bomb attacks in Urumqi, provincial capital of Xinjiang which border Pakistan Occupied Kashmir (POK).