Curfew imposed after a Muslim and a Buddhist killed in Myanmar riots

Dozens of armed police were seen patrolling the tense streets of Mandalay where shops were shuttered after angry mobs rampaged through the normally bustling central metropolis for two consecutive nights.

Two men, one Buddhist and one Muslim, were killed in violence that continued into Thursday morning, police said.

It is the latest of several waves of sectarian unrest that have exposed deep religious tensions in the Buddhist-majority nation as it emerges from decades of military rule.

"We do not want the situation getting worse," senior Mandalay police officer Zaw Min Oo told AFP, explaining that the 9:00 pm to 5:00 am restrictions were for "security reasons".

Inter-communal violence has overshadowed widely praised political reforms since erupting in 2012. It has largely targeted Muslims, leaving at least 250 people dead and tens of thousands homeless.

Buddhist rioters, some armed with sticks and knives, attacked a Muslim teashop on Tuesday and surrounding property in downtown Mandalay after an accusation of rape, according to local police.

Security forces fired rubber bullets in the early hours of Wednesday to try and disperse the crowds.

Unrest then broke out again late Wednesday despite an increase in security, with pockets of violence flaring across the centre of the city of some seven million people.

Police said the two men were killed in separate attacks overnight. About 10 other people were injured.

In a monthly radio address, Myanmar's reformist President Thein Sein said the country was a "multi-racial and -religious nation" that could only maintain stability if people live "harmoniously".

"For the reform to be successful, I would like to urge all to avoid instigation and behaviour that incite hatred among our fellow citizens," he said, according to an official transcript.

The former general has been credited with pushing through dramatic reforms since the ex-junta handed power to a nominally civilian government in 2011.

But the sectarian conflicts have provided a major test for his administration and prompted warnings that the country's fragile transition towards democracy could be at risk.

The United States Embassy in Yangon issued a message on its official Twitter feed urging calm and swift action against the perpetrators.

"Rule by law not rumour and mob action (is) essential for justice, stability and development," it said.

Muslims in Myanmar account for an estimated four percent of the roughly 60 million population.

Sectarian clashes flared up two years ago in western Rakhine state, with fighting that has displaced about 140,000 people, mainly stateless Rohingya Muslims.

It has since broadened into sporadic attacks against Muslim communities across the country, with violence often provoked by rumours or individual criminal acts.

Radical monks have been accused of stoking religious tensions with fiery warnings that Buddhism is under threat from Islam.

A prominent hardline monk, Wirathu, posted a link to online allegations against the teashop owners on his Facebook page just hours before the latest unrest flared up.

He has since posted only about Buddhist victims of the violence, ramping up the tension with allegations that Mandalay's mosques have issued a "jihad" with hundreds of people poised to launch an attack after receiving "military training".

A Mandalay resident, who was a friend of the slain Muslim, said the victim was beaten to death by a group of five or six men early Thursday.

"He did not have anything to do with the violence. He was just going to the mosque to pray," he told AFP, asking not to be named for fear of reprisals.

"We cannot say the situation in Mandalay has calmed down yet. We are living in fear. We do not know what will happen."

A funeral for the Muslim man, a popular local bicycle shop owner, was held Thursday.

A service for the Buddhist victim is due to be held on Friday.

Mandalay, which is about a three hour drive from the capital Naypyidaw, has large Muslim and ethnic Chinese populations.

But it is also known as the country's monastic heartland and is home to tens of thousands of monks, including Wirathu.

His radical Buddhist nationalist movement has proposed boycotts of Muslim businesses and backed suggestions for a series of controversial laws -- due to be debated by parliament -- that would restrict religious freedoms.