Myanmar's junta has declared martial law in a town in Chin State after blaming "armed terrorists" for attacks on a police station and a bank.

According to state media, the decision was taken amid an upsurge in fighting between the military and ethnic rebels in border areas.

People using homemade guns attacked a police station and the Myanmar Economic Bank in the town of Mindat Thursday.

A document declaring the imposition of martial law in the town in Chin State, which borders India, was posted in The Global New Light of Myanmar, a state newspaper.

A spokesman for the Chinland Defence Force, a newly formed militia, said it was behind the latest fighting.

According to an advocacy group, 788 people have so far been killed in the brutal suppression of protests by security forces.