BAKU, Azerbaijan (AP) — It began late at night with a minor car accident.

By midday Thursday, a hotel had been burned to the ground, several expensive vehicles torched and crowds were facing off with police to demand a leading regional official's resignation.

The episode has exposed latent tensions nurtured by economic inequality and unresponsive governance in the oil-abundant Azerbaijan. The ostentatious display of wealth and aggressive, arrogant behavior among well-connected individuals is commonplace across resource-rich former Soviet republics and engenders much bitterness.

That appears to have served as the spark for the unrest in Ismayilli, a resort town of 15,000 people beside a hilly nature reserve 175 kilometers (110 miles) from the capital, Baku.

Trouble began Wednesday night when the owner of a local hotel, 22-year-old Emil Shamsaddinov, reacted to his Chevrolet Camaro sports car veering onto a sidewalk and colliding with an electricity pole by getting into a fight with another motorist.

The person Shamsaddinov fought with was parked by the side of the road in a Soviet-era Zhiguli, the ubiquitous model favored for cheapness rather than quality.

Shamsaddinov, who police said may have been drunk, berated and swore at onlookers, prompting an angry reaction from a group of Ismayilli's residents.

The dispute quickly escalated, leading to around 3,000 people raiding Shamsaddinov's Chyrag hotel — the name of the hotel means "fire" in Azeri — and setting alight several of his cars, which included the Camaro, a Chevrolet Niva and a Hummer.

Police, who took Shamsaddinov and his passenger into custody, say the rampage lasted about four hours.

In amateur video of burning vehicles and buildings uploaded to the Internet, people in the crowd are heard laughing and cheering.

The mob then directed its ire at the son of the Ismayilli district chief, whose house they also attacked. There they set fire to a Toyota Land Cruiser and two motorcycles.

Radio Free Europe/Radio Liberty's Azerbaijan service, which is funded by the U.S. Congress, cited local residents as saying Shamsaddinov's hotel was being used for prostitution and that local authorities had failed to heed requests for it to be closed.

On Thursday, despite an increased security presence in the town, hundreds of people went back onto the streets and surrounded a regional government building and demanded the regional governor resign.

Independent news agency Turan reporter Aziz Kerimov told The Associated Press by telephone from Ismayilli that police fired tear gas and water cannons at half-hour intervals as the crowd refused to disperse.

Some in the crowd responded to police appeals for them to leave the area by throwing rocks. Between 10 and 15 people were detained by early afternoon, Kerimov said.

Calm had returned to Ismayilli by the evening, although the anger may not have subsided.

Kerimov quoted people in Ismayilli as saying they want to repeat the scenario that played out in another town last year, when a regional official was forced to step down in the wake of violent clashes.

Baku, Azerbaijan's capital, has in recent years become a glamorous playground for the country's elite, but oil revenue is unevenly distributed among the mainly Muslim country's 9 million people, and average monthly salaries stand around $450. That has nurtured frustration.

Business is often perceived in Azerbaijan as operating in intimate collusion with the government, which opposition activists argue is riddled with corruption.

Berlin-based Transparency International ranked Azerbaijan 139th out of 176 countries in its 2012 Corruption Perception Index. Opposition parties and independent journalists are routinely harassed by the authorities.

This is the second major instance of public disorder in the authoritarian former Soviet nation in only a few days.

On Saturday, market traders blocked a highway 50 kilometers (30 miles) outside Baku and clashed with riot police in a spontaneous protest over increased rent for their stalls.

A week before that, in Baku itself, hundreds of demonstrators gathered in a central square to protest the death of a military conscript earlier this month. The demonstration was broken up by police. That rally was organized through social media, not by established opposition parties — an indication that opposition to the government is increasingly being propelled by grass-roots activism.

Authorities are particularly anxious about any signs of public discontent in view of this October's presidential election, which is expected to see incumbent Ilham Aliyev retain his iron grip over the Caspian Sea nation.

Regional officials are appointed by the president, who on Thursday was attending the World Economic Forum in Davos, Switzerland.