Striking teachers rejected a proposal to allow police back in this embattled colonial city and gunfire erupted when leftist protesters tried to seize a government building, dimming hopes for a quick resolution to five months of turmoil.
The teachers and leftists have taken over large parts of Oaxaca and driven police out of much of downtown, scaring away tourists and costing businesses millions of dollars in lost revenue. The national government had proposed allowing police to resume patrols under federal command, trying to ease protesters' fear of reprisals by state officials.
But the teachers said they would not consider the plan until Mexico's Senate rules on their main demand: the resignation of Oaxaca state. Gov. Ulises Ruiz. They accuse the governor of rigging his 2004 election and setting armed gangs against his opponent.
Since late May, the protesters have set up barricades, seized media outlets, burned buses and essentially run police out of Oaxaca's picturesque, arch-ringed main plaza.
On Wednesday, protesters tried to seize or block more state government offices ahead of a visit by a Senate commission trying to assess the conflict.
Gunfire erupted when a band of strike enforcers tried to take over the offices of a public safety agency, carrying clubs and rocks. The hooded protesters, known as the "mobile brigade," had seized the same building weeks ago, beating one official inside.
This time, they were met with gunfire from police inside the building. Ministerial Police Director Manuel Moreno Rivas said police fired into the air, but there were no injuries. Protesters said two of their group were grazed by bullets.
Protesters also blocked most of the highways leading in and out of Oaxaca.
The senators were expected to arrive Thursday to determine if the state government had lost control, a situation that could allow the Senate to remove Ruiz from office. Ruiz has called for the army to act against the protesters, a request that has so far been denied.