I'd agree with flamin' monkey on this. If you go on a killing spree with the guards once you'll be ok. I don't remember many of my games where I didn't annoy them at some point. The merchants were always pretty cool with me afterwards.
You do it a few times your rep. will plummet faster than a lead balloon though....

Kiya-the guards remain hostile until your rep improves again.

" Road rage, air rage. Why should I be forced to divide my rage into seperate categories? To me, it's just one big, all-around, everyday rage. I don't have time for distinctions. I'm too busy screaming at people. " -George Carlin