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South African police fired rubber bullets at hundreds of shantytown residents on Tuesday in a crackdown on violence against foreigners that has killed at least 24 people and unnerved investors.

The army could be called in to quell the violence as criminals were exploiting the situation, the president of the ruling African National Congress (ANC), Jacob Zuma, said in a radio interview.

The rand currency fell sharply after more than a week of attacks on African migrant workers, accused by many poor township dwellers of stealing jobs and fuelling a wave of violent crime.

Local media said two people were killed overnight in the Ramaphosa squatter settlement east of Johannesburg.

Police fired volleys of rubber bullets to disperse about 700 people who earlier forced foreigners from the area, Reuters TV cameraman John Mkhize said. At least two people were injured.

Thousands of foreigners, mostly from Zimbabwe, Mozambique and Malawi, have fled into refugee shelters since the violence began on May 11 in Alexandra township.

Several foreigners have been burned to death, women raped and scores of shops and homes looted. More than 200 people have been arrested.

Zuma told the BBC World Service criminals were using the attacks as a cover.

"What we have detected so far is criminality. I would not rule out (bringing in the army) because we need to take the measures that are going to help us stop the violence," he said.

The violence unsettled investors who feared the xenophobic attacks could hurt the economy. The rand currency fell as much as 1.7 percent to 7.68 to the dollar.

"We've got the domestic xenophobic violence which is scaring investors away, so these factors are combining to create a weaker rand," said David Gracey, a trader at Nedbank.

South Africa's tourism minister, Marthinus van Schalkwyk, said the violence could hurt the sector, which contributes around 8 percent of Gross Domestic Product to Africa's biggest economy, employs a million people and attracted 8.4 million visitors last year.

WORLD CUP

The South African Football Association said the attacks could harm the country's bid to host a successful soccer World Cup in 2010.

"You know attacks like this ... are very sad for football, are very sad for the country," SAFA CEO Raymond Hack told Reuters. "So we need to ensure that it (the violence) is brought to an end as quickly as possible".

Local World Cup organizers have dismissed persistent reports international soccer body FIFA is considering stripping South Africa of the tournament.

The ANC said the situation was coming under control after it sent officials into townships to urge an end to the attacks.

Police also increased their deployment to trouble spots.

"We are going hard on the situation," said Safety and Security Minister Charles Nqakula.

The unrest threatens to increase political instability at a time of power shortages, rising inflation and disaffection among the poor over President Thabo Mbeki's pro-business policies.

Mbeki has faced strong criticism, especially from ANC left wingers, for not spreading the benefits of black rule to millions of poor people.

South Africa, with a population of 50 million, is home to an estimated 5 million immigrants. Foreigners have been lured from poorer neighbors by work in mines, farms and homes and by one of the world's most liberal immigration and refugee policies.

The biggest group -- an estimated 3 million -- are from Zimbabwe. They have fled economic collapse at home and the violent political standoff since disputed March 29 elections.

Mbeki's critics say his softly, softly approach has done too little to end the crisis or stem the flow of migrants.