Indian army troops patrolled parts of the northeastern state of Assam on Wednesday after eight people were killed as rampaging mobs burned the homes of hundreds of settlers from the eastern state of Bihar.

Several local organizations, among them a key separatist guerrilla group, gave migrants from neighboring Bihar a deadline of seven days within which to leave Assam, as a dispute triggered by competition for jobs flared into violence.

"You can say many parts of Assam are on fire," said a senior police officer who declined to be identified.

Four women and two children belonging to one family were hacked to death and their home set alight in the town of Dibrugarh, about 250 km (155 miles) from Guwahati, a key city in the oil- and tea-rich state of Assam, a police spokesman said.

Thousands of people sought shelter in police stations across Assam, which is also torn by a 25-year-old insurgency, as crowds targeted Biharis, setting fire to their homes built of wood and roofed with tin.

The mobs looted houses, assaulted the people living in them and then set them on fire using petrol and kerosene.

Police also discovered two unidentified bodies wounded with sharp objects on the streets of the eastern town of Tinsukia early on Wednesday. Soldiers patrolled Tinsukia and Dibrugarh, the two districts worst affected, in a bid to restore calm.

ORDERED TO LEAVE

Several local groups ordered Biharis to leave Assam within seven days. One separatist group even vowed to kill them.

"All Biharis staying in the state should immediately move out of Assam, or face bullets," said Paresh Barua, commander-in-chief of the United Liberation Front of Asom (ULFA).

Suspected ULFA rebels on Tuesday night opened fire with automatic weapons to kill four people watching a local cricket match in the district of Dhubri near Guwahati, police said.

Seven people were also injured in the attack on migrants from Bihar.

The ULFA, which is fighting for an independent nation of Assam for an estimated 26 million people, accuses New Delhi of plundering the state's resources and neglecting its development.

The trouble in the state began after Assamese train travelers were attacked in Bihar last week following reports early this month of assaults on some Bihari students who came to Assam to do tests for railway jobs.

Assamese students feared Biharis might corner the railway jobs that were available.

Though thousands of Biharis have settled in Assam over the years, there have been no reports of tension between the communities until now.

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