The security forces have been using tear gas and rubber bullets to disperse demonstrators demanding jobs.
There are also reports of people being treated for shotgun injuries at the town’s hospital.
Tunisia was the birthplace of the Arab Spring, deposing their long-time president in January 2011.
Hunger strike
The BBC’s Sihem Hassaini in the capital, Tunis, says the unrest in Siliana is the latest in a series of protests by people disappointed by the lack of progress following the revolution.
She says residents went on strike on Tuesday, angered that the mayor had failed to create jobs.
All offices and businesses in Siliana, which is about 120km (75 miles) south of Tunis, remained closed on Wednesday, as protests continued.
According to AFP news agency, several armoured vehicles were deployed as demonstrators set up barricaded on Wednesday.
The protestors have been throwing stones and thick clouds of tear gas can be seen over the town centre, our correspondent says.
Doctors at Siliana Hospital estimate the wounded number between 150 and 200.
Thirteen serious cases have been transferred to a hospital in Tunis, a medical source told the state-run Tap news agency.
David Thomson, a journalist for France24 news channel, tweeted from Siliana hospital where he was being treated for a shotgun wound. He said other patients had been admitted for more serious injuries.
Our reporter says the MP for Siliana, Iyed Dahmani, has begun a hunger strike, demanding more opportunities for his constituents.
Since the uprising which overthrew Zine al-Abidine Ben Ali unemployment has gone up – and according to a survey by the Tunisian National Institute of Statistics stands at about 18