Violent clashes in Andijan killed nine and wounded 34, the ITAR-Tass news agency said on Friday, citing President Islam Karimov's office.
Armed crowds surrounded police officers on Friday in two districts of the city and talks were under way to free them, ITAR-Tass said.
In a separate incident in the capital, Tashkent, a man described as a bomber was shot and killed outside the Israeli Embassy on Friday morning, according to the US Embassy.
However, an Uzbek police official, speaking on condition of anonymity, later said the man was carrying only wooden objects that appeared to be explosives. No other casualties were reported in that incident.
In Andijan, armed protesters freed inmates from a prison and security forces fired in the air as thousands of activists rallied to protest against the trial of 23 Muslim businessmen on extremism charges, witnesses said.
Karimov and other leaders arrived in Andijan to assess the situation.
Karimov travelled to Andijan
where protests have killed nine
"The people have risen," Valijon Atakhonjonov, the brother of one of defendants in the trial, said.
Atakhonjonov, reached by telephone from Tashkent, described chaos in the streets of Andijan, with shots being fired into the air and thousands of people massing in front of the local administration building.
Uzbek authorities blocked foreign television broadcasts on Friday, preventing news channels such as CNN and BBC as well as Russian channels from being seen in the country.
A government spokesman in Andijan, reached by telephone, said city and regional administrative buildings remained under government control.
Armed demonstrators went to a prison to free inmates overnight, Atakhonjonov said, but he could not confirm reports that the crowd had attacked an army garrison as well.
Aljazeera's Akram Khuzam, reporting from Moscow, quoted the Uzbek Foreign Ministry as saying the security forces were in control of Andijan and that they do not want to disperse demonstrators by force.
The fighters that stormed the prison on Thursday called for Karimov's resignation, appealing to Russia to mediate and achieve their demand, unofficial Uzbek sources told Aljazeera.
Some want Russia to intervene
in Uzbek political affairs
The protesters chanted slogans, calling for democracy and better job opportunities for the thousands of unemployed people in Uzbekistan, the correspondent said.
The 23 defendants are charged with anti-constitutional activity and forming a criminal and extremist organisation, but rights activists say the case is part of a broad government crackdown on religious dissent.
All of the defendants pleaded not guilty at their trial, which opened 10 February.
Several thousand joined a protest on Wednesday, demanding that the 23 men be freed in one of the largest recent public shows of mounting anger over alleged rights abuses by the ex-Soviet republic's government.
Activists who joined the Wednesday protest were not responsible for the overnight attack on the prison, Atakhonjonov said.
Protesters were not linked to the
The men, arrested in June, are accused of being members of the Akramia religious group and having contacts with the outlawed Islamic party Hizb-ut-Tahrir.
Authorities accuse Hizb-ut-Tahrir of inspiring attacks in Uzbekistan last year that killed more than 50. The group denied responsibility.
Akramia unites followers of jailed Uzbek Islamist dissident Akram Yuldashev, who was accused of calling for the overthrow of the predominantly Muslim country's secular government - an accusation he denies.
The group's members are considered the backbone of Andijan's small business community, giving employment to thousands of people in the impoverished and densely populated Fergana Valley.