Fourteen terrorists were killed as they attacked police officers with knives and explosives in Kashgar, in the southern Xinjiang Uygur autonomous region, on Sunday night.
Two officers were killed in the clash, the local information office said on Monday.
Two members of the terrorist cell were also arrested.
The police officers were on their way to catch criminal suspects at around 11 pm in Sayibage township, Shufu county, near Kashgar when they were attacked by a violent mob armed with knives and explosives.
Chen Li, deputy director of the information office of Kashgar prefecture, said that the incident is still under investigation.
The attackers are violent terrorists and their behavior should be condemned, Ministry of Foreign Affairs spokeswoman Hua Chunying said at a news briefing on Monday.
The incident "once again showed the true face of violent terror".
Last month, nine people armed with axes and knives were shot dead when they attacked a police station in Selibuya township, Bachu county, killing two assistant officers.
In April, a terrorist attack by a 25-member gang left 21 dead in Selibuya, including six attackers and six police officers. The clash was described by the region’s information office as a "severe, violent terror incident".
The police investigation determined the gang had watched and listened to material related to religious extremism and terrorism. The members learned to kill by watching footage of terrorist attacks.
More than 190 violent and terrorist cases were recorded in Xinjiang in 2012, a sharp increase from the previous year, Oriental Outlook magazine reported last month.
The weekly said that more than 100 organizations or groups that endangered State security have been broken up annually by police since 2009, citing statistics from the Xinjiang Public Security Bureau.