Most people in the area are Muslim Rohingya, a stateless minority people viewed as illegal immigrants by Buddhist nationalists even though many have lived in Myanmar for generations.
The government says that at least 250 people, presumed to be Muslims, launched coordinated attacks on three border police posts in Rakhine state over the last few days and has sent troops to the area.
These are the first major attacks since 2012, when sectarian violence in Rakhine killed more than 100 people and drove tens of thousands of Rohingya into displacement camps.
"Since the attack, we have documented several videos showing armed men - some had guns, some had sticks and swords - speaking the Rohingya language and encouraging volunteers to come engage in armed conflict in Rakhine State," Matthew Smith from Fortify Rights, a non-profit human rights organisation, told RFI.
"This is a very serious situation unfolding there. The government of Myanmar has commenced with what appear to be a very brutal crackdown, we're documenting allegations of extrajudicial killings. Essentially the Myanmar army moving into villages, suspecting all of the men and boys of being involved with this rather small group of armed men and committing a variety of human rights violation."
The authorities have extended a regional curfew to between 7.00pm and 6.00am and closed about 400 schools for the next two weeks.
Fears of return to 2012 violence
"For years now we've tried to fight for our rights, but the government has always wanted to wipe the Rohingya population out," Ro Nay San Lwin, a Rohingya activist who lives in exile in Germany since being banned from returning to Myanmar because of his political activities, told RFI.
"That situation won't change, Rohingya will be more persecuted because they blame the Rohingya for these attacks. Their situation is worse than ever. And people who are depending on daily wages cannot any more, so now many people are starving, just because they cannot go to work, they cannot go from one village to another, they all are locked inside their own villages."
Witnesses have told him that at least 50 people were killed and several mass graves have been discovered.
"We are very concerned, and afraid of attacks that would particularly target the Rohingya civilians," Wai Wai Nu, a former political prisoner and cofounder of Yangon-based Justice for Women says. "There has been many hate speeches among the general population in Myanmar. Right now, we are worried that the situation could get worse than in 2012."
There are also concerns the military response could provoke a backlash, not only from the Rohingya but also from other Muslim ethic minorities in the region.
"The biggest potential problem is that we now have a well-organised, heavily armed Muslim groupd that will be fighting for its rights in Rakhine. That will be deeply destabilising," Tim Johnston, from the International Crisis Group, told RFI.
"Myanmar is a new democracy, its institutions aren't that strong, it has a number of other ethnic battles up on its north-eastern border and elsewhere, and this will make life a lot more complicated for the government. And one thing that we do really worry about is that it will provoke a backlash against Muslims, not just in Rakhine State, but across Myanmar."
Suu Kyi appoints commission
Myanmar's de facto leader, Aung San Suu Kyi, recently appointed a commission, headed by the former UN chief Kofi Annan, to find ways to solve the issue.
But it is difficult to know what is actually happening on the ground because the authorities are preventing access to the area.
For example, journalists can hardly enter Rakhine, a point that Matthew Smith believes should change.
"The government frankly has quite a lot to hide, in particular in Rakhine state," he says.
A report from UN High Commissioner for Human Rights Zeid Ra’ad Al Hussein in June talked of Rohingya suffering "arbitrary deprivation of nationality, severe restrictions on freedom of movement, threats to life and security, denial of rights to health and education, forced labour, sexual violence and limitations to their political rights".
"None of this coincides with the narrative of positive political change happening in Myanmar and we do expect the authorities to act urgenty in this case," Smith comments, adding that he is concerned that Annan explicity said the commission would not focus on human rights issues in Rakhine.
This alone raises the question of the very goal of the commission's work, he claims.