KAMPALA, April 16 (Reuters) - Ugandan police said on Monday they had arrested two opposition politicians and 25 other people in connection with a violent protest targeting Asians last week in which a man was stoned to death.

Rioters stormed through the capital Kampala on Thursday in protest at a government proposal to grant an Indian-owned company almost a third of a rainforest reserve to grow sugarcane.

Mobs looted shops and killed one Indian man. Others were beaten and more than 100 Asians were rescued by police.

"We have 27 suspects in custody suspected of crimes ranging from murder to incitement to violence, shop-breaking and theft and assault," police spokesman Simeo Nsubuga told Reuters.

Two rioters were shot dead in the fracas, apparently by private security guards.

Nsubuga said two members of parliament, Beatrice Atim and Hussein Kyanjo, were among those arrested on Monday. Both had been involved in organising last Thursday's demonstration.

He did not say what charges they might face.

Scenes of Asian men dragged off motorbikes and beaten while others ran for cover into shops and a Hindu temple sparked bitter memories of 1972, when Uganda's late former dictator Idi Amin expelled the country's 75,000 Asians.

Though several thousand have since returned, some Ugandans resent them because of their domination of many businesses.

Last year, President Yoweri Museveni ordered a study into whether to raze at least 7,000 hectares (17,000 acres) of Mabira Forest, a nature reserve since 1932, to expand the sugar estate of the privately-owned Mehta Group.

The plan sparked public outrage. Critics say axing Mabira will devastate local ecosystems and dry up lakes and rivers.

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