BEIJING, June 13 (Reuters) - About 5,000 people clashed with police in northern China last week during a protest against forced relocation, a Hong Kong human rights watchdog said on Wednesday.

At least 20 people were injured, two women seriously, and three were arrested during the incident in the Inner Mongolia region last Friday, in which three police cars were smashed, the Information Centre for Human Rights and Democracy said.

Thousands blocked a highway in the city of Hohhot to protest against inadequate compensation for their homes' demolition to make way for a new plaza, it said.

"We're dealing with this carefully, but the situation is now under control," Meng Shude, spokesman for the Communist Party in Inner Mongolia, told Reuters.

The incident comes as Hohhot gears up to celebrate the 60th anniversary of the establishment of the Inner Mongolia Autonomous Region.

Chinese have become increasingly bold about protesting over home demolitions, pollution and corrupt land grabs as China's booming cities and factories swallow up neighbourhoods and farmland.

Thousands marched in the streets this month in the southeastern seaside city of Xiamen to demand that plans for a paraxylene plant be scrapped.

Villagers in Guangxi rioted and burned cars in May to protest overly strict enforcement of family planning policies.

Official figures show the number of so-called "mass incidents" was 23,000 in 2006, compared to about 10,000 in 1994, but down from 74,000 in 2004.

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