VENTERSDORP, South Africa (Reuters) - South African President Jacob Zuma called for calm on Sunday after the killing of white far-right leader Eugene Terre'blanche in a suspected pay dispute with black workers fanned fears of racial strains.

Police detained two farm workers and said they were investigating the quarrel they had with Terre'blanche, but his Afrikaner Resistance Movement (AWB) says he was battered and hacked to death in an attack with political overtones.

Zuma, who has made it a priority to court white Afrikaners, called it a "terrible deed" and urged South Africans "not to allow agent provocateurs to take advantage of this situation by inciting or fuelling racial hatred".

Terre'blanche, 69, was the voice of hardline opposition to the end of apartheid in the early 1990s although his party has played a marginal role since then and does not have a big following among the 10 percent of white South Africans.

The AWB urged restraint while the funeral is prepared and before the party decides next steps. In Ventersdorp, in rolling farmland over 100 km (60 miles) west of Johannesburg, party followers in paramilitary khaki laid flowers at the farm gate.

"We will decide upon the action we are going to take to avenge Mr Terre'blanche's death," said spokesman Andre Visagie.

Concerns over increasing racial polarisation have been thrown into the open by a row over the singing of an apartheid-era song with the lyrics "Kill the Boer" by the youth leader of the ruling African National Congress.

The ANC has defended the song as no more than a way to remember a history of oppression, but it has worried minority groups and particularly white farmers, some 3,000 of whom have been killed since the end of apartheid.

STRAIN

"The killing of Terre'blanche will symbolically be seen as a strain of these relationships," said analyst Nic Borain of HBC Securities.

"But Terre'blanche is an old criminal and I don't think people would come to his defence or his killing somehow invigorate white people opposition to the new South Africa."

Terre'blanche's party did not hesitate to link the murder to the song. He had always described himself as a Boer.

"That's what this is all about," Visagie said.

Zuma's spokesman Vincent Magwenya said, however, there was no evidence at this stage linking the killing to the song sung by firebrand ANC youth wing leader Julius Malema.

Terre'blanche had lived in relative obscurity since his release from prison in 2004 after serving a sentence for beating a black man nearly to death.

The party -- whose flag resembles a Nazi swastika -- was revived two years ago and he had begun efforts to try to build a united front among white far-right parties to fight for a white homeland, but had gained little traction.

Terre'blanche was a powerful orator in his Afrikaans language and was a distinctive figure, heavily built, with a thick grey beard and dressed in khaki. He often attended rallies on horseback during his fight to stop majority rule.

Police said the suspected killers were aged 16 and 21. Both had worked for Terre'blanche.

"It seems there was a dispute between and these guys were arrested ... The police are investigating and the public will be kept abreast," Police Minister Nathi Mthethwa told a news conference. "Somebody is dead, can we keep it at that."