Several objects were thrown and fighting broke out when Uighur protesters advanced towards lines of anti-riot police carrying clubs and shields.
The latest clash came as a group of foreign reporters, including Al Jazeera's correspondent, were being taken on a tour of the city to see the aftermath of Sunday's riots.
The protest follows reports that Chinese police had arrested more than 1,400 people in a crackdown aimed at stifling Uighur unrest.
Earlier on Tuesday, state media quoted the head of the Chinese Communist party in Xinjiang as saying Sunday's unrest had been quelled, although he warned "this struggle is far from over".
Wang Lequan called for officials to launch "a struggle against separatism".
The worst unrest in Xinjiang for many years has led authorities to impose a security lockdown on much of the region.
Hundreds of paramilitary police with rifles, clubs and shields have been deployed on the streets of Urumqi and a night-time curfew was imposed on Monday.
|Government forces are out in force in the Xinjiang region [AFP]
Local residents also reported that internet and mobile phone connections in Urumqi were down.
According to Chinese state media, Sunday's clashes erupted after a demonstration against the government's handling of an industrial dispute turned violent.
Reports also suggested that the unrest could be spreading to other parts of the vast Xinjiang region.
According to China's state-run Xinhua news agency, police dispersed around 200 people on Monday evening who had gathered outside the main mosque in the ancient Silk Road city of Kashgar.
Exiles reject blame
The Chinese government has blamed Uighur exiles for stoking the unrest, singling out Rebiya Kadeer, a Uighur businesswoman who was jailed for years in China before being released into exile in the US where she now heads the World Uighur Congress, for "masterminding" the unrest.
"Rebiya had phone conversations with people in China on July 5 in order to incite, and websites such as Uighurbiz.cn and Diyarim.com were used to orchestrate the incitement and spread of propaganda," said Nur Bekri, the governor of Xinjiang.
And Communist party official Wang said "we must tear away Rebiya's mask and let the world see her true nature".
But Kadeer, a 62-year-old mother of 11, rejected the accusations on Monday, saying from Washington that they were "completely false".
"I did not organise any protests or call on the people to demonstrate," she said.
Explaining to reporters that she called her brother in Xinjiang when she learnt of the violence in Urumqi to warn her 40 relatives in the region to stay away from the demonstrations, she said: "A call I made to my brother does not mean I organised the whole event."
Activists say the clashes started when armed police moved in to break up a peaceful demonstration called after two Uighur workers at a toy factory in southern China were killed in a clash with Han Chinese staff late last month.
Kadeer said the protests in Urumqi started peacefully.
"They were not violent as the Chinese government has accused. They were not rioters or separatists," she said.
She did, however, condemn "the violent actions of some of the Uighur demonstrators", saying her organisation supported only peaceful protests.
Alim Seytoff, a spokesman for the Kadeer's World Uighur Congress pressure group, told Al Jazeera that the clashes broke out when armed police and armoured vehicles moved in to forcefully break up the demonstration, opening fire on protesters.
"It is common practice for Beijing to blame outsiders for any problems in Xinjiang, as it does with problems in Tibet," he said.
"The root cause of the problem is really the Chinese government's long-standing repressive policies."