Trials of 200 suspects accused of involvement in deadly July riots to start this week.
The demonstration, which comes months after deadly ethnic rioting in the city that left nearly 200 dead, is a rare public challenge by Han Chinese to the ruling Communist Party.
“Resign Wang Lequan, the government is useless!” protesters shouted outside the regional government building in Urumqi, referring to Xinjiang’s Communist Party chief, who has held office for 14 years.
Others called for his execution.
A resident told the Reuters news agency he had seen a group of Han Chinese protesters beating a Uighur suspected of carrying out attacks with syringes, but he was rescued by police and taken to hospital.
Other witnesses said they had seen ethnic Uighurs, a Turkic-speaking Muslim people native to the region, being beaten up by Han Chinese.
Violence broke out in the city in July this year, after Uighurs attacked Han Chinese in Urumqi after protesting against attacks on workers at a factory in south China, in which two Uighurs were killed.
Han Chinese in Urumqi sought revenge two days later.
State media said police have detained 15 people for the reported stabbing attacks in Urumqi, but did not say how many people had been attacked.
Rumours of Aids patients attacking pedestrians with hypodermic needles have previously swept China, but were later shown to be unfounded.