A UN spokeswoman said as-yet-unconfirmed reports put the death toll to at least 17 people and maybe as high as 30.
A hospital source said 17 people were killed and 20 injured when police opened fire on a protest march. An official source said the toll was lower.
Abd Allah Musa Abd Allah, secretary-general of the Beja Congress in Red Sea state, said he had seen 17 bodies in the hospital morgue and had the names of three other people killed.
A witness, Khalil Usman Khalil, told Aljazeera the protest started on Friday night.
"Clashes took place between demonstrators and police, lasting for almost all Friday night," he said.
"There was a special police unit that appeared and just opened fire at them before they even moved"
Abd Allah Musa Abd Allah, secretary-general,
Beja Congress in Red Sea state
"Work at Port Sudan was partially stopped, and almost completely this morning, after renewal of violence, so police resorted to disperse demonstrators," Khalil said on Saturday.
Abd Allah said he was present in the morning when 300 to 400 members of the Beja ethnic group gathered for a march to demand the Khartoum government start negotiations with the Beja on sharing power and the country's resources.
"There was a special police unit that appeared and just opened fire at them before they even moved. They fired at their heads and bodies, not even in the air," he said. Three children were among those killed, he added.
The hospital source said all of the wounds were from bullets.
List of demands
Three days ago members of eastern tribes, mostly the Beja, presented a list of demands to the Red Sea state governor,
including wealth and power sharing. They warned they would take unspecified action if the demands were not met within 72 hours.
"This time was up today and they started a march towards the wali's [governor] office," the hospital source said, adding the police stopped the march before it got very far.
The source said seven soldiers were injured by stones, but only civilians suffered gunshot wounds.
UN spokeswoman Radhia Achouri said the United Nations was
concerned at the reports of violence and that if it escalated, it could detract from a peace deal signed earlier this month to end more than two decades of civil war in the south.
"It's a big, big problem which we would face if the situation in the east would blow up in our face," she said.
The mediator hands president
the southern peace agreement
Abd Allah said the Beja Congress, a local ethnic-based party with a military wing, had asked the governor of the Red Sea state to withdraw security forces from residential areas and the governor had complied. "It is relatively calm now," he added.
The interior ministry declined to comment on the numbers killed but said: "A number of civilians tried to create a state of chaos in the town ... and the police forces moved to challenge them."
The regional security committee on Saturday placed the town
under a night-time curfew from 5pm (1500 GMT) to 6am for two consecutive nights, Sudan's state news agency said.
The minister of finance in Port Sudan, Ali Mahmud, said a number of the demonstrators this morning started looting shops and the police had intervened.
Malnutrition in the east is said
to be worse than in Darfur
The Beja Congress, like other Sudanese opposition groups,
accuses the Khartoum government of neglecting the remote regions of the country in favour of the centre, which is the powerbase of the traditional political elite.
They see the agreement this month between the government and the southern rebels of the Sudan People's Liberation Movement as a model for their own regions. The agreement gives the southerners a share of their region's oil revenues.
The World Food Programme says some areas of eastern Sudan have higher malnutrition rates than the crisis-hit western Darfur region.