ANTIQUES SHOPS

Houses were burnt down late on Wednesday in two villages near the Bangladesh border, but there were no reports of further deaths. Scores of people are feared to have died in the rioting that broke out in Rakhine state on June 8.

Violence has largely subsided in after days of arson attacks and killing that have presented reformist President Thein Sein with one of his biggest challenges since taking office last year.

Places that had been flashpoints earlier in the week, including state capital Sittwe, were quiet, said Caw Tun, a member of a development group, the Wan Latt Foundation.

"Tensions between the two groups have eased. There are around 20,000 refugees in Sittwe. Most of them are from the villages where people fled in fear of the violence," Aung Myat Kyaw, a senator for Rakhine state, told Reuters.

"They are in need of food and, because of the heavy rain, there are concerns about the refugees' health and whether they have enough shelter," he added.

The violence had killed 21 people as of Monday, state media said, but activists fear the death toll could be much higher. At least 1,600 houses have been burnt down.

The army has taken hundreds of Rohingyas to Muslim villages outside Sittwe to ensure their safety.

"They are worried for their lives. The army is there so their life is secure," said Shwe Maung, a Muslim member of parliament for the ruling Union Solidarity and Development Party. "There are still so many Rohingyas in downtown Sittwe and they are afraid of being attacked."

The United Nations and a medical aid group said this week they were pulling staff out of the area because of the violence. U.N. special envoy for Myanmar, Vijay Nambiar, travelled to the area on Wednesday.

It is unclear what sparked the rioting. Relations between the two communities have been uneasy for generations and 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 in reprisal 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.

POLITICAL REFORM

The violence follows a year of dramatic political change after nearly 50 years of repressive military rule.

Hundreds of political prisoners have been freed, truces struck with ethnic minority rebel groups and the opposition party of Nobel Peace laureate Aung San Suu Kyi swept by-elections.

The government has also allowed trade unions and promised to get rid of forced labor. Recognizing this progress, the International Labor Organization lifted restrictions on Myanmar on Wednesday.

That announcement in Geneva came just before Suu Kyi arrived in the city for her first trip to Europe in a quarter of a century.

That is another sign of the transformation of the former Burma: under the junta, she refused to leave the country, afraid the generals would not let her back in to pursue the fight for democracy.

The communal violence in Rakhine state and the international reaction may prompt further change: the Rohingyas are not included among the officially recognized ethnic groups of Myanmar but Thein Sein may be forced to improve their plight.

Up to 800,000 Rohingyas live along Myanmar's border with Bangladesh in abject conditions. Neither country recognizes them as citizens and the Bangladeshi authorities have turned away boats of Rohingyas fleeing the violence this week.

(Reporting by Reuters staff reporters; Writing by Alan Raybould; Editing by Robert Birsel)