Police in Madagascar made seven more arrests Sunday over the lynching by a raging mob of two Europeans and a local man accused of killing and mutilating a young boy.

Authorities on the idyllic Indian Ocean island have now arrested 26 people in all after the bloody events on the resort island of Nosy Be on Thursday.

The situation appeared calm on Sunday, with members of the security forces patrolling the streets while local residents attended church and tourists strolled in town or headed to the beach.

Thursday's rampage was sparked by the gruesome death of an eight-year-old local boy, whose body was found on the popular Ambatoloaka beach a week after he went missing.

An official at the local gendarmerie said seven people had been arrested early Sunday in Ambatoloaka and the suburb of Dar-es-Salam where the boy lived.

Vincent Laza, a neighbourhood leader on the island, told AFP that the boy's body was wet when it was found, suggesting he may have drowned, and that his genitals were missing and his intestines were exposed.

Reports circulated that the boy had been kidnapped, causing a mob to storm the gendarme station -- convinced that one of the boy's killers was being held there.

Officers opened fire and two people were killed.

Amid rumours that foreigners were involved, a mob of hundreds got their hands on a Frenchman and a Franco-Italian on Thursday and torched them on Ambatoloaka.

Pictures and video images taken by residents captured the moment when one of the bodies was burned in front of about 100 people, including a man who was both armed and wearing a uniform.

Afterwards a pile of ash, wood, a torso and a pair of charred legs were the only recognisable signs of the orgy of violence.

The boy's uncle was later also killed and burned.

With its white sandy beaches and turquoise waters, Nosy Be is Madagascar's main tourist magnet, but it also has a seedy underbelly and is known for sex tourism.

Mob justice is common on the vast island nation off the southeastern African coast, which authorities struggle to police effectively.

'It's public justice -- we just kill them'

One resident of Nosy Be claimed the crowd had made sure the Europeans were guilty.

"They spoke for a long time until the morning hours, and then the foreigners confessed they had killed the child. We have it on video," said Lala, who lives in the Dar-es-Salam suburb where the local man was killed.

In an audio recording, one of the victims was however heard declaring his innocence as the crowd accused him of being a paedophile and killer.

District head Malaza Ramanamahafahy named the Frenchman as Sebastien Judalet and said his passport indicated he was a frequent visitor to Madagascar.

Ramanamahafahy added that the Franco-Italian, whom he named as Roberto Gianfala, had an expired Madagascan visa.

Both France and Italy confirmed the deaths and have urged their citizens on Nosy Be to remain vigilant and stay indoors at night.

French police have opened a murder investigation into the death of Judalet, who lived in a Paris suburb, a judicial source told AFP.

About 700 French people live on the island of 40,000 residents, with around 100 French tourists currently visiting.