China's premier and the Dalai Lama had a heated exchange of views on Tuesday despite Beijing's insistence that it will not negotiate with the exiled Tibetan spiritual leader. It happened like this: Premier Wen Jiabao told a news conference in Beijing that there is "plenty of evidence" that last week's pro-independence protests and rioting in Lhasa were "organised, pre-meditated, masterminded and incited by the Dalai clique". They had, said Wen, created "turmoil" that "inflicted heavy losses of lives and property". Hours later, the Dalai Lama held a press conference from his base in Dharmsala, India, where he denied any support for violence in dramatic terms. "If things become out of control then my only option is to completely resign", he said.

His aides later clarified that the Dalai Lama wanted to stress his opposition to violence; he meant he would  resign as a political leader and head of state in exile, but not as spiritual leader. "If Tibetans were to choose the path of violence he would have to resign because he is completely committed to non-violence," top aide Tenzin Taklha explained to the Associated Press.

All in all, it was a difficult day for Premier Wen, and signals more difficult days to come if calls for an Olympic boycott gain ground. China's bold attempt to project soft power by staging the Olympic Games has crunched up against the harder realities of sovereignty and stability. Wen expressed the soft power project in clear terms. A successful Olympics means "the smiles of 1.3 billion Chinese people will be reciprocated by the smiles of people all over the world", he said. He condemned those who want to undermine the Games and "serve their hidden agenda".

Journalists asked if China would now reopen stalled talks on the future of Tibet by inviting the Tibetan leader to Beijing for negotiations. Wen reiterated that "our door for dialogue is wide open" if the Dalai Lama would abandon independence as a goal (which he says he has). However, Wen said the violence in Lhasa has "revealed the consistent claims by the Dalai clique [that] they pursue not independence but peaceful dialogue are nothing but lies".

Foreign journalists pursued the Tibet issue, asking for permission to visit. Wen said Lhasa is "basically returning to normal" and will be reopened. "We will certainly consider the possibly of organising foreign media to go to Lhasa and see what's happened".   

The risks of openness were illustrated in a small way right at the end of the highly-controlled press conference, which usually permits one question each from pre-selected media representing different countries. Suddenly, Wen departed from the script to reward an Indian journalist who had raised his hand many times. The result? Another question about Tibet, and its border with India. Wen's smile collapsed.

In Tibet itself, Lhasa does seem to be calmer. Residents reported being able to leave their houses, stroll and buy vegetables. "It’s actually quite nice to be out, everybody’s been greeting each other," one Lhasa resident said. Though everyday life is resuming, the International Campaign for Tibet (ICT) said its sources had reported a "terrifying" atmosphere as soldiers conduct house to house searches.

The first-ever demonstration by Tibetans in Beijing took place overnight as some 50 Tibetan students at the National Minorities University held a silent vigil into the small hours of Tuesday, according to the ICT. The vigil was surrounded by a security cordon and quietly tolerated. Similar student protests have taken place in Chengdu and Lanzhou, but such protests have little in common with recent eruptions of violence against the authorities in small Tibetan towns in Sichuan and Gansu provinces. They suggest that China's claim to be restoring order is justified.

Wen was keen to explain his fears that China faces "the most difficult year for the Chinese economy" because of overheating and inflation, but comments that would normally be red meat to foreign journalists attracted little interest.

Instead, he faced a question about the HIV/Aids activist and blogger Hu Jia, who went on trial on Tuesday charged with subversion over six articles he has written and two interviews given to radio stations. Hu was detained after criticising the Olympics in a web-cam session with an EU parliamentary committee. The EU presidency called for his release on Monday. Wen said Hu would be "dealt with according to the law" and insisted the "view that China is trying to increase its efforts to arrest its critics before the Olympics.....[is] totally unfounded". It seems that Beijing may have managed to restore public order in rioting cities in the last couple of days, but it is in growing danger of seeing its Olympic dream tarnished.