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By Francis Kwera and Euan Denholm

KAMPALA, April 12 (Reuters) - A mob stoned to death an Asian man in Uganda on Thursday and two other people were killed during a protest over a plan to cut down nearly a third of a rainforest reserve to grow sugarcane, police and witnesses said.

Troops in armoured cars were deployed in central Kampala after police fired tear gas and bullets to stop rioters attacking Asian businesses and a Hindu temple, angered by moves to expand an Indian-owned company's sugar plantations.

The capital's police commander, Edward Ochom, told Reuters three people were dead.

"One is an Asian man who was stoned to death by the rioters. The other two are Ugandans and we are still investigating their deaths," he said.

As scores of demonstrators hurled rocks at police in pouring rain, officers rescued more than 100 Asian men besieged in a Hindu temple and elsewhere, and rushed them to a police station. Dozens were arrested.

"We were inside the temple and the protesters started attacking us from outside," 50-year-old Dipaul Patel told Reuters. "It was very frightening."

Uganda's police chief, Major-General Kale Kayihura, told the sheltering group anyone targeting them would in turn be targeted by his force. "I want you to be secure," he said.

The scenes outside were a sharp reminder of 1972, when the late former dictator Idi Amin expelled Uganda's Asians.

Thousands have returned, but are viewed with suspicion by some Ugandans who resent their domination of many businesses.

One Indian supermarket owner who gave his name as Kumr said rioters pulled him from his motorbike then beat him.

"I am blaming the police for this," he said. "What investor will want to come here?"

Police chiefs had approved Thursday's march, called to protest plans to cut down thousands of hectares of Mabira Forest to expand the estate of local sugar company Scoul.

Scoul is part of the Indian-owned Mehta Group.

FOREST TARGETED

Protest organiser Frank Muramuzi said the march began peacefully, before a "misunderstanding" with the police.

"All of a sudden they opened fire with tear gas and live ammunition," he said. "Everyone scattered."

The controversy began last year when President Yoweri Museveni ordered a study into whether to axe 7,000 hectares (17,000 acres) or nearly a third of Mabira.

Mabira -- which has been a nature reserve since 1932 -- is one of Uganda's last remaining patches of natural forest.

The government's proposal angered some parliamentarians and residents. They said the environmental costs of slashing the forest would far exceed the economic benefits of the plantation.

Environmentalists say destroying Mabira could have grave ecological consequences, from increased soil erosion to the drying up of rivers and rainfall, and the removal of a buffer against polluting nearby Lake Victoria.

They say it would also threaten monkeys and nine species found only in Mabira and surrounding forests -- the Tit Hylia bird, six butterflies, a moth and a shrub used to treat malaria.

In a newspaper advertisement published on Thursday, Scoul said "anti-development lobby groups" were misleading Uganda's public about the company's plans for Mabira.

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