YANGON: Prolonged displacement of Rohingya refugees in squalid Bangladeshi camps poses a "grave security risk", conflict analysts ICG warned Thursday, raising the spectre of militants recruiting among the displaced and launching cross-border attacks on Myanmar.

Raids by the Arakan Rohingya Salvation Army (ARSA) on August 25 sparked the vicious Myanmar army response which has forced more than 620,000 Rohingya to flee Rakhine state for Bangladesh.

ARSA "appears determined to regroup and remain relevant" and may draw on desperate Rohingya refugees languishing in camps for future operations, the ICG International Crisis Group said in the report.

The group may "shift to cross-border attacks" using Bangladesh as a base for recruitment and training, the study said, cautioning the risk of an ever-deepening cycle of violence is all too real.

"Such attacks would have profoundly negative consequences," straining Myanmar-Bangladesh relations and worsening contempt for the Rohingya "that would further diminish prospects of an eventual refugee return".

Global outcry over the refugee crisis, one of the worst in recent history, has triggered a hyper-defensive response inside the country, where anti-Rohingya attitudes have hardened since ARSA's emergence.

Myanmar does not recognise the Rohingya as a distinct ethnic group eligible for citizenship, instead calling them "Bengali", suggesting they are illegal immigrants.

In another serious looming risk, ICG warned that Rohingya's plight has become a "cause celebre of the Muslim world" with Al-Qaeda, Islamic State and other global jihadi groups calling for attacks on Myanmar.

Myanmar's military has repeatedly used the terror threat to justify its campaign in northern Rakhine state.

ARSA has distanced itself from any wider global cause for jihad, saying it is only fighting to protect Rohingya rights.

International pressure is ratcheting up on Myanmar.

This week the UN rights chief said Myanmar's crackdown on the Rohingya showed possible "elements of genocide", as calls for the safe and sustainable repatriation of refugees grows.

Myanmar refutes any wrongdoing saying it was forced into a defensive action by ARSA attacks.

It has agreed with Bangladesh to start repatriation of "eligible" refugees within a few months.

But there are widespread doubts over how many Rohingya can prove they are entitled to return to Rakhine, or want to go back to areas riddled with communal mistrust and where their villages were razed.

China, a key strategic ally of Myanmar, is pitching itself as an arbiter in the crisis, and has repeatedly urged the international community to take a softline on Myanmar.

But pressure is mounting in the West -- particularly Washington -- to reimpose targeted sanctions on Myanmar military figures.

Sanctions were slowly rolled back in recent years as reward for democratic gains after decades of outright junta rule.

The ICG study said any fresh sanctions would backfire by isolating Myanmar and calcifying hatred towards the Rohingya. -AFP