Most of the casualties were being treated in the city of Cajamarca and the town of Celendin where the clashes occurred - near where the U.S. company plans to build the biggest mine in Peruvian history, the official, Reynaldo Nunez Campos, said.

A regional governor for the Cajamarca region, Jaime Gonzales, denounced the violent demonstrations.

"At around midday, there was a demonstration of close to a thousand people in Celendin and some 300 or 400 people made their way to the municipality building of Celendin. They broke doors, took computers and destroyed them in public roads. The police went to the area, broke them up using chemical agents. They were able to disperse the people and in response they were fired on with firearms and there are two police officers with bullet wounds. It was the people and not the police if you think otherwise," Gonzales said.

Tuesday marked the first time rallies turned deadly in Cajamarca since protests started there late last year.

As a result, some government officials have called for the suspension of freedom of assembly to quell clashes between hundreds of police, soldiers and protesters.

The president of the region of Cajamarca, Gregorio Santos, who has been a strident critic of the proposed mine, accused Peruvian President Ollanta Humala's government of putting big miners ahead of poor peasants left behind by the country's decade-long economic boom.

"As the president of the region I have the responsibility to inform that the irresponsible handling of the social conflict led by the Peruvian President has led to these bloody consequences," Santos said.

Humala took office a year ago urging mediation to solve hundreds of disputes over spoils from natural-resource projects, but has since used emergency rules at least twice to end anti-mining protests in one of the world's top metals exporters. Critics say the harsher measures are symptomatic of his drift to the right.

Protesters have halted nearly all work at Newmont's Conga mine since November, saying it would cause pollution, harm water supplies, and fail to bring enough local economic benefits.

Protesters have expressed outrage that Humala gave permission a week ago to proceed with construction of the project after Newmont agreed to comply with a more stringent environmental mitigation plan recommended by outside experts. Humala's green light ended a seven-month-long impasse over the mine's future.

Humala has said the project is vital for Peru as it would generate thousands of jobs and huge tax revenues in one of Latin America's fastest-growing economies.