JOHANNESBURG (Reuters) - Two people have been killed and 256 arrested for looting and other offences in violent social unrest that left a trail of damage in the central South African industrial city of Sasolburg, police said on Wednesday.

The protests that began earlier this week over plans to incorporate the industrial area with a poorer part of the region had mostly quieted down after three days of some of the most intense street battles to hit Africa's largest economy.

At their peak, thousands of people torched vehicles, looted shops and threw stones at police who tried to break up the protests by firing rubber bullets and setting off stun grenades.

"There were too many businesses that were damaged, We are still taking stock," police colonel Motantsi Makhele told Reuters.

One person was killed in a clash outside a police station and the other died when protesters tried to loot a store, he said.

The opposition Democratic Alliance said police fired live ammunition during the protest, a charge that could further tarnish the image of police facing criticism for shooting dead 34 strikers last year at a Lonmin platinum mine, the deadliest security incident since apartheid ended in 1994.

Petrochemical group Sasol lost nearly 1 percent in trading on the Johannesburg bourse on Tuesday, with market players worried the protests could hurt its operations, which are based in the town.

Many impoverished areas have been rocked by "service delivery protests", in which residents block streets and square off with the police to complain about the way the ruling African National Congress has been running their town.

The number of such protests averaged 21 annually in the five years before President Jacob Zuma took office in 2009 but jumped to more than 110 since then, according to monitoring group Municipal IQ.

(Reporting by Jon Herskovitz; Editing by Ed Cropley)

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