Longstanding tension divides Xinjiang's eight million Turkic-speaking, Muslim Uighur minority from the dominant influx of Han migrants.
Beijing has pumped funds to develop the oil-rich region on a goal of bringing its GDP on par with the national average in five years.
Discontented Uighurs complain that their cultural freedom is restrained and they claim that the region's economic policies mainly benefit the Hans.
Beijing has in the past blamed sporadic attacks in Xinjiang on fringe extremists seeking an independent Turkestan. Last year, seven paramilitary personnel died in a bomb attack in Xinjiang.
The situation in Hotan, an ancient trading post oasis on the famed Silk Road, remained tense after the attack, with police sealing off roads in and out of the city and "large numbers" of anti-Chinese flyers circulating, Raxit said in an emailed statement.
Xinjiang -- a vast, arid but resource-rich region bordering Central Asia -- is home to more than eight million Turkic-speaking Uighurs.
Many are unhappy with what they say has been decades of repressive rule by Beijing and unwanted Han immigration.