Those who remained in the Rakhine state capital slowly started to venture on to the streets after tensions between ethnic Rakhine Buddhists and Muslim Rohingyas appeared to have eased after five days of rioting, arson and knife attacks.

The worst communal violence in Myanmar since a reformist government replaced an oppressive junta last year had left 21 people dead as of Monday, state media said, but activists fear the death toll could be much higher. Another 21 had been wounded and 1,662 houses burnt down.

The violence follows a year of dramatic political change, including the freeing of hundreds of political prisoners, the signing of peace deals with ethnic minority rebel groups and the holding of by-elections dominated by Nobel Peace laureate Aung San Suu Kyi's opposition party.

All this had persuaded the United States and Europe to suspend economic sanctions, and both have urged the authorities to restore order.

Shwe Maung, a Muslim member of parliament for the ruling Union Solidarity and Development Party, told Reuters in Yangon that the authorities were providing help to Muslims who had lost their homes or were too frightened to go back to them.

"With help from the army, 10 trucks of Muslims were sent to Thae Chaung village ... They were sent from downtown Sittwe to the remote areas because their houses were burned," he said.

"Some women and children are receiving food, rations and clothes from the Ministry of Resettlement," he added.

Khaing Kaung San, head of a Sittwe-based development group, Wan Latt Foundation, said 25,000 people had taken refuge in what he called camps in Sittwe, mostly monasteries and schools.

Vijay Nambiar, the United Nations' special envoy to Myanmar, flew to the area on Wednesday and visited the town of Maungdaw, where the unrest started on Friday.

It is unclear what sparked the rioting. Relations between the two communities have been uneasy for generations but tension flared last month after the gang rape and murder of a Buddhist woman that was blamed on Muslims.

That led to the killing of 10 Muslims on June 3, when a Buddhist mob stopped a bus they were travelling on. The passengers had no connection to the murdered woman. State media said three Muslims are on trial for the woman's death.

No fires were visible in Sittwe, the state capital, on Wednesday, when heavy rain fell all day. Reuters reporters said many shops remained closed but more people ventured outside their homes.

Soldiers and police with loudspeakers patrolled the streets, warning they would not tolerate people carrying weapons and that anyone attempting to set fire to buildings would be dealt with.

RISK OF VIOLENCE SPREADING

The crisis is likely to force Thein Sein, a former general, to confront an issue that human rights groups have criticised for years: the plight of up to 800,000 Rohingyas who live along Myanmar's border with Bangladesh in abject conditions.

"Unless the government takes steps not just to end the violence but also lay the groundwork for protection of minority communities, there is a risk of the violence spreading," the International Crisis Group, a non-governmental research organisation, said in a report published late on Tuesday.

"How the government handles this case will be a major test of the police and courts in a country that has just begun to emerge from an authoritarian past. It will also test the government's will and capacity to reverse a longstanding policy of discrimination toward the Muslim Rohingyas."

Rohingyas say their lineage in Rakhine dates back centuries but the government regards them as illegal immigrants from Bangladesh and denies them citizenship.

Bangladesh has refused to grant them refugee status since 1992, when tens of thousands of them flooded into the country, complaining of persecution by the Myanmar military.

In recent days, hundreds of Rohingyas have tried to flee in rickety boats to Bangladesh but its foreign minister, Dipu Moni, told reporters Bangladesh would not take them in despite a request from the U.N. High Commissioner for Refugees.

"We are already overburdened with Myanmar Muslims who fled into this country over many years and we can take no more, under any circumstances," she said.

Major Shafiqur Rahman of the Bangladesh Border Guard told Reuters by phone that 110 Rohingyas in three boats had landed in Teknaf on the southern tip of the Bangladesh mainland in the early hours of Wednesday.

"They landed on our beach defying objections by the coastguard. We have detained them all, mostly women and children, and will push back later today," he said.

The two countries are separated in the area by a river that flows into the Bay of Bengal.

Bangladeshi officials said about 30 Rohingyas had managed to enter Bangladesh. Ten had been injured in the violence and one of them, a man aged about 70, had died of gunshot wounds in hospital. Three were in critical condition.

(Additional reporting by Anis Ahmed in Dhaka; Writing by Alan Rayould; Editing by Nick Macfie)

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