However, a top government official denied that Lhasa was under martial law.
But other senior officials said protesters would be dealt with firmly.
Al Jazeera's Tony Cheng, reporting from Beijing, said the riots were a testament to the growing anger among the locals over what they call the "Chinese occupation of Tibet".
He said: "People seem to have had enough of Chinese rule, and have expressed that on the streets of Lhasa."
Thupten Samphel, a spokesman for the Tibetan government-in-exile in Dharamsala, northern India, told Al Jazeera that there were unconfirmed reports of a much higher death toll.
"We are hearing that over 100 people have been killed in the violence."
Thupten said: "Over an extended period of time, there has been a blatant violation of human rights in Tibet. There have been restrictions on freedom of speech and freedom of thought.
"If China really wants calm restored to the country, it is in the best interests to engage in dialogue with the Dalai Lama, and other Tibetans in exile."
"We will deal harshly with these criminals in accordance with the law," Champa Phuntsok, chairman of the Tibetan government, said. "Calm will be restored very soon."
|Tibetans in exile have staged protests|
in major Asian capitals [AFP]
Chinese officials also asked rioters to surrender by Monday midnight if they wanted leniency.
Urgen Tensing of the Tibetan Centre for Human Rights and Democracy, told Al Jazeera that there were hardly any people on the streets on Saturday.
"The streets are virtually deserted, and all people are seeing are tanks and other vehicles," he said.
"There are also reports coming out that Chinese officials have given activists and protestors a deadline - March 17 - to surrender and stop the demonstrations, or they will be arrested."
"We will handle this according to the law," Qiangba Puncog, chairman of the Tibet autonomous regional government, told reporters on the sidelines of the annual session of the Chinese parliament in Beijing.
Qiangba claimed the protests were part of a "separatist" movement that authorities would not allow to succeed.
He said: "The plot of the separatists will fail. We will challenge them firmly, according to law."
According to a Tibetan source, police fired live ammunition into a crowd on Friday after hundreds of people joined protests against Chinese rule led by Buddhist monks.
Angry Tibetan crowds in the remote mountain city attacked government offices, burned vehicles and shops and threw stones at police in bloody confrontations that also left many injured.
Many police officers were badly injured in the clashes, Chinese state media said, while also reporting that a mosque and other buildings had been set on fire.
Lhasa is now bracing itself for more clashes on Saturday after protesters challenged Chinese rule in the fiercest pro-independence rioting to have rocked the region in two decades.
The unrest comes amid a growing international campaign by Tibetans to challenge Beijing's rule of the Himalayan region.
China accused followers of the Dalai Lama of masterminding the protests, which has battered its carefully cultivated image of national harmony in the build-up to the Beijing Olympics in August.
The protests, which began on Friday morning, were led by 100 monks and quickly attracted other Tibetans.
Witnesses reported hearing gunfire and seeing vehicles in flames in the city's main Barkor shopping district.
Crowds hurled rocks at security forces and at restaurant and hotel windows.
Chinese authorities reportedly used tear gas and electric prods to disperse hundreds of protesters, and detained up to 50 monks. Growing protests
Four people have been arrested in Sydney, Australia, in pro-Tibet demonstrations.
Protesters scaled a wall surrounding the Chinese consulate on Saturday, and removed the Chinese national flag and tried to replace it with a Tibetan flag, local television reported.
The flag was lowered from its flagpole at the entrance to the consulate by youths screaming "Human Rights in Tibet".
The Dalai Lama, Tibet's spiritual leader, urged China not to use force against protesters.
|The Dalai Lama denies involvement in|
organising the protests [File: AFP]
"I ... appeal to the Chinese leadership to stop using force and address the long-simmering resentment of the Tibetan people through dialogue with the Tibetan people," he said in a statement issued from his base in Dharamsala.
"I also urge my fellow Tibetans not to resort to violence."
The Tibet regional government said there had been enough evidence to prove that the troubles in Lhasa were "organised, premeditated and masterminded by the Dalai clique".
A spokesman for the Dalai Lama said the allegations are "absolutely baseless".
The Dalai Lama fled into exile in India after a failed uprising in 1959, nine years after the invasion of Chinese troops.
This week marks the 49th anniversary of the failed uprising, with protests being held in major Asian capitals.