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United States Monday urged Myanmar to halt attacks on ethnic minorities, saying it was "deeply concerned" about the fighting.
"We urge the Burmese authorities to cease their military campaign and to develop a genuine dialogue with the ethnic minority groups, as well as with Burma's democratic opposition," State Department spokesman Ian Kelly said in a statement.
The junta-run television in Myanmar, which was earlier known as Burma, said Sunday that 26 state security personnel and eight ethnic rebel fighters had been killed in three days of clashes near the Chinese border.
The broadcast ended a news blackout on the unrest between the army and rebel Kokang forces in the remote northeast of Myanmar, formerly called Burma.
Kelly said "the brutal fighting has forced thousands of civilians to flee their homes for safety in Thailand and China, and has reduced both stability and the prospects for national reconciliation in Burma."
Refugees headed back across the border Monday, but some said they feared a fresh outbreak of violence.
Officials in China's southwestern Yunnan province said 37,000 refugees had streamed into the country from Myanmar following days of fighting in Kokang, a mainly ethnic Chinese region of Myanmar's Shan state.
The fighting comes as President Barack Obama's administration reviews its policy toward Myanmar which has been under both US and European Union sanctions.
"I would expect sometime in the next couple weeks, as we get through the summer holidays and... the Labor Day break, that we will have a final review and approval of a Burma strategy," Kelly said.
He declined to answer questions about Washington's stand on sanctions.
The Obama team has been skeptical about sanctions as a diplomatic tool and supports engagement with US foes.
The United States and European Union have imposed sanctions on Myanmar due to its refusal to recognize the last elections in 1990 and prolonged detention of the victor, democracy icon Aung San Suu Kyi.
US Senator Jim Webb, after returning last week from a rare trip to Myanmar, called sanctions against the military regime "overwhelmingly counterproductive" and asked the opposition to consider taking part in upcoming elections.
Webb, whose against-the-grain views on Myanmar have infuriated some activists, voiced concern that Western isolation of Myanmar pushed it into the arms of China, "furthering a dangerous strategic imbalance in the region."
