It is still nearly five months before the Olympic torch is to be lit in Beijing, officially starting the 29^th summer Olympics. But, diplomats in the Chinese capital believe that a high level game of chicken has already begun, one that has now turned deadly - first, in Lhasa, the capital of what China calls the Tibet Autonomous Region, and now elsewhere, according to Tibetan exiles and human rights groups.

Yesterday, in China’s Sichuan province, at least eight bodies were brought to a Buddhist monastery in Aba prefecture, allegedly shot dead by Chinese riot control police, according to an eyewitness account quoted by Radio Free Asia. The escalating confrontation in and around Tibet is a nightmare for China’s top leadership, but one, some diplomats believe, that could not have taken anyone in the central government completely by surprise. It pits the leadership in Beijing against its domestic opponents - who include not only Tibetan dissidents, but also separatist groups in the heavily Muslim region of Xinjiang, as well as human rights and political activists throughout the country.

Each side understood that the months leading up to the Games would be “extremely sensitive,” as one diplomat put it. The government knew “from day one,” another diplomat told TIME, that “a successful bid for the games would bring an unprecedented - and in some cases very harsh - spotlight” on China and how it is governed. On the other side, everyone from human rights activists to independence seeking dissidents in Tibet and Xinjiang - “splittists” in the Chinese vernacular - knew they would have an opportunity to push their agendas while the world was watching. “Thought the specific trigger for this in Tibet is still unclear, that it intensified so quickly is probably not just an accident,” the senior diplomat says.

According to this view, it was never hard to imagine a scenario in which some group - and maybe several - would push things, try “to probe and see whether they could test limits.” The critical issue, now front and center, diplomats say, is just how far angry Tibetan activists will push - and how harshly the Chinese government will push back.

How extensive the violence has been thus far is not at all clear. Tibetan exile groups claimed on Sunday that 80 people were killed in Lhasa on Mar. 13 and 14. Those claims are as yet unconfirmed by any independent reporting and Beijing says just 10 “innocent” people were killed in Lhasa. It denies any deaths elsewhere. The Dalai Lama surely stoked Beijing’s anger on Sunday by claiming, from the headquarters of the Tibetan government in exile, when he accused China of “cultural genocide” against Tibetans and by declining to urge his followers in Tibet to surrender to authorities there by midnight tonight, as Beijing had demanded.

Thus, the dilemma for the Chinese leadership is clear. “They need to get this under control, but to do so without a lot of brutality,” the diplomat says. The reason for that is clear enough: the memory of Tiananmen Square, undeniably, now hangs in the background as the crisis in Tibet unfolds in this, the year of China’s grand coming out party. The scale of the unrest in the Tibet Autonomous Region - as well as the threat they pose to the Communist Party leadership - doesn’t compare to the massive political demonstrations in Tiananmen Square in 1989, which were brutally put down by Chinese military troops. But the issue, at bottom, was the same: how to respond? And here, China may well understand that 1989 was a long time ago. Beijing in those days could literally pull the plug on CNN and Dan Rather and then thumb its nose at the rest of the world. “It couldn’t do that today even if it wanted to, and I don’t think it does,” the senior diplomat says.

China understands well, this diplomat says, that the world is carefully gauging how it responds to the unrest. He notes that initial reports out of Lhasa had the People’s Armed Police, an anti-riot squad, responding to the demonstrations - not the potentially much more lethal People’s Liberation Army. The problem for China is that the unrest, while apparently contained for the moment in Lhasa, spread to other cities on Sunday. The government’s dilemma is obvious: if Beijing insists publicly - and actually believes - it has been relatively restrained in its response to the unrest so far, what happens if it continues? “Knowing full well that something like this - maybe not as intense, but something of this sort was likely to come before the Olympics,” says the diplomat, “is different than knowing exactly what to do when it comes. I’m not sure the leadership has a specific playbook for it.” Let’s just hope it doesn’t reach for the old one, circa the spring of 1989.