The Canadian teen heartthrob - who has repeatedly denied he is dating the Disney star - was spotted enjoying a romantic walk withSelena in Miami.
When the pair were realised they had been seen, the `Baby` hitmaker reportedly tried to walk away from the 18-year-old singer-and-actress, who started nervously played with her hair.
An onlooker said: "They seemed to know they had been caught out and were quick to run off."
The rumoured couple were then spotted hanging out on Justin`s tour bus and he was pictured gently resting his hand on her back.
Meanwhile, the 16-year-old pop sensation was forced to stop a concert last week after a fight broke out over a sweaty towel he had thrown to the crowd.
The audience of mostly teenage girls were watching Justin in Pittsburgh but became rowdy during his hit `Baby` after the towel was caught by one fan, who soon discovered she faced stiff competition to keep the smelly memento
The situation got so bad Justin had to stop his track and address his fans.
He told them: "You can`t fight over it, don`t fight over it. Someone`s gonna get hurt. Let it go, let it go, let it go!"
Justin then took the matter into his own hands, pointing at one of the girls who had been wrestling for the towel, saying "Give it to her."
He then attempted to restart `Baby`, but had to stop singing again because he was laughing so hard.
Starting the track for a third time, Justin let the crowd help him through the first verse.