The Southeast Asian country has been in chaos since a coup in February, with more than 1,200 people killed in a crackdown on dissent, according to a local monitoring group.

Across Myanmar, "self-defence forces" have sprung up to take on the junta, escalating attacks and bloody reprisals.

Junta troops shelled the town of Thantlang in western Chin state after a confrontation with a local self-defence force, according to Khit Thit media and The Chindwin news outlet.

A Thantlang resident who had fled the town following earlier clashes told AFP the shelling began after members of the local force captured a soldier.

"Soon after it happened, heavy artilleries were fired," he said, adding he had heard between 80 and 100 houses had been destroyed.

"We don't know if houses were burned after being hit by artilleries or if they set fire to the houses."

"We... don't even know what to say," said one woman still living in the town contacted by AFP, who said her house had been destroyed, before hanging up.

Pictures published on local media showed pillars of smoke billowing into the sky from the town perched amid green hills.

AFP could not independently verify the reports from the remote region.

"At least 100 buildings are thought to have been destroyed so far by the fire... which reportedly broke out at around 11:00 am following the use of heavy weapons," Save the Children said in a statement.

"Fire continues to tear through the town and there is no fire service available to control the blaze," it said, adding one of its offices had been damaged.

Most of Thantlang's 7,500 inhabitants left the town during clashes last month, with many fleeing across the border to India.

Save the Children said the town was "largely deserted" when the shelling occurred, and its staff had already left following the earlier violence.

The United Nations said last week it feared an even greater human rights catastrophe amid reports of thousands of troops massing in the north and west of the country.

In May, government forces used artillery to flush out rebels from the town of Mindat in the southern part of Chin state, and later cut off its water supply, according to a spokesman for a local insurgent group.