Mobs set fire to Muslim homes and mosques in frenzied sectarian rioting in a town in central Myanmar, leaving at least 20 people dead and more than 6000 homeless amid growing fears  the bloodshed could spread.

In an acknowledgement of the seriousness of the situation, President Thein Sein declared a state of emergency in Meikhtila in an announcement broadcast on state television Friday afternoon. The declaration allows the military to take over administrative functions in and around the town.

The government's struggle to contain the unrest is proving another major challenge for Thein Sein's reformist administration as it attempts to chart a path to democracy after nearly half a century of military rule that once crushed all dissent.

The scenes in Meikhtila, where homes and at least five mosques have been torched by angry mobs, were reminiscent of sectarian violence between ethnic Rakhine Buddhists and Muslim Rohingya that shook western Rakhine state last year, killing hundreds of people and driving more than 100,000 from their homes.

The clashes in Meikhtila - which was tense but calm Friday - are the first reported in central Myanmar since then.

Troubles began Wednesday after an argument broke out between a Muslim gold shop owner and his Buddhist customers. A Buddhist monk was among the first killed, inflaming tensions that led a Buddhist mob to rampage through a Muslim neighborhood.

Violence continued Thursday, and by Friday, Win Htein, a local lawmaker from the opposition National League for Democracy, said he had counted at least 20 bodies.

He said 1200 Muslim families - at least 6,000 people - have fled their homes and taken refuge at a stadium and a police station.

On Friday, police seized knives, swords, hammers and sticks from young men in the streets and detained scores of looters.

Fires set to Muslim homes continued to burn, but angry Buddhist residents and monks prevented authorities from putting out the blazes.

It was difficult to determine the extent of destruction in the town because residents were too afraid to walk the streets and were sheltering in monasteries or other locations away from the violence.

"We don't feel safe and we have now moved inside a monastery," said Sein Shwe, a shop owner. "The situation is unpredictable and dangerous."

Some monks accosted and threatened journalists trying to cover the unrest, at one point trying to drag a group of several out of a van.

One monk, whose faced was covered, shoved a foot-long dagger at the neck of an Associated Press photographer and demanded his camera. The photographer defused the situation by handing over his camera's memory card.

The group of nine journalists took refuge in a monastery and stayed there until a police unit was able to escort them to safety.

The UN secretary-general's special adviser to Myanmar, Vijay Nambiar, issued a statement expressing "deep sorrow at the tragic loss of lives and destruction."

He said religious and community leaders to must "publicly call on their followers to abjure violence, respect the law and promote peace."

The US ambassador to Myanmar, Derek Mitchell, also said he was "deeply concerned about reports of violence and widespread property damage in Meikhtila."

Meikhtila is about 550 kilometers north of the main city of Yangon with a population of about 100,000 people, of which about a third are Muslims, Win Htein said.

He said before this week's violence there were 17 mosques.

There was no apparent direct connection between the Meikhtila violence and that last year in Rakhine state. Rakhine Buddhists allege that Rohingya are mostly illegal immigrants from neighboring Bangladesh.

The Muslim population of Meikhtila is believed to be mostly of Indian origin, and although religious tensions are longstanding, the incident sparking the violence seemed to be a small and isolated dispute.

Occasional isolated violence involving Myanmar's majority Buddhist and minority Muslim communities has occurred for decades.

Under the military governments that ruled Myanmar from 1962 until 2011, ethnic and religious unrest was typically hushed up, an approach made easier in pre-Internet days, when there was a state monopoly on daily newspapers, radio and television, backed by tough censorship of other media.

But since an elected, though still military-backed, government took power in 2011, people have been using the Internet and social media in increasing numbers, and the press has been unshackled, with censorship mostly dropped and privately owned daily newspapers expected to hit the streets in the next few months.

The government of Thein Sein is constrained from using open force to quell unrest because it needs foreign approval in order to woo aid and investment.

The previous military junta had no such compunctions about using force, and was ostracized by the international community for its human rights abuses

- AP