It said the mob first attacked a police station and government offices in the township of Elixku before moving on to a neighboring township, attacking civilians and smashing vehicles along the way.
Xinhua said dozens of people were killed or injured in the attacks but gave no precise figures. It also said that police shot and killed dozens of the attackers.
"Initial investigation showed that it was a premeditated terror attack. Further investigation is under way," Xinhua said.
Calls to more than a half-dozen police stations and government offices in the area either rang unanswered Tuesday evening or were answered by people who confirmed the attack but said they were not permitted to release any information about it.
Obtaining details of violence in the remote region is usually impossible and authorities routinely prevent foreign journalists from working freely in the area.
There has been increasing violence in Xinjiang in recent months blamed on pro-independence militants from the region's native Turkic Uighur Muslim ethnic group. While some of the attacks have shown an increased level of sophistication and planning, most have relied on crude weaponry such as swords, bombs and homemade explosives.
China's government says the attackers have ties to overseas Islamic terror groups, although it has provided little evidence to back up its claim.
Uighur (pronounced WEE-gur) activists say repressive Chinese cultural and religious policies are fueling resentment among Uighurs, along with a sense that the benefits of economic growth in the resource-rich region are flowing disproportionately to migrants from the country's Han Chinese majority.
Also known as Yarkant, Shache is near the border with the unstable Central Asian states, about 3,500 kilometers (2,175 miles) west of Beijing.
source: huffingtonpost.com By CHRISTOPHER BODEEN