Mozambique's government deployed troops to clear barricades in the capital as angry protesters blocked roads and looted shops on Thursday.
Demonstrators blocked roads with burning tyres and looted shops in Maputo on Thursday as riots sparked by soaring bread prices entered a second day.
At least two children have been shot dead in clashes between police and rioters in and around Maputo on Wednesday in rallies over rising prices.
Mozambique's main opposition party, Renamo, on Tuesday rejected the election victory of President Armando Guebuza, saying a fresh poll must be held.
Mozambicans voted in presidential, parliamentary and provincial elections on Wednesday, with President Armando Guebuza expected to retain power.
Crisis talks collapsed on Friday as Madagascar's rivals failed to agree who should hold key posts in a transition government.
Madagascar's ex-leader Marc Ravalomanana refused to accept Andry Rajoelina's nomination as president of a new transitional government.
A Mozambican and South African consortium, Petroline Holdings, plans to start building a $620-million oil pipeline linking Johannesburg to Maputo.
Mozambique's ruling Frelimo party on Sunday re-nominated sitting President Armando Guebuza as its candidate for the 2009 presidential election.
Zimbabwe has paid back $650 000 in arrears to the African Development Bank (ADB), despite vast economic problems at home, as part of efforts to meet commitments to donors, the bank said on Monday. "Zimbabwe has in all paid $650 000 to the bank group despite numerous economic challenges," the bank said.
Mozambique's target of 8% economic growth this year is realistic despite floods and cyclones which hit the country this year, a World Bank official said. The World Bank's Mozambique director Michael Baxter also said inflation, which stood at 8,4% in 2007, could be kept in single digits in 2008.