The European Union will cut back contacts with Myanmar's top generals in a first step to increase sanctions over an army offensive that has driven more than 500,000 Rohingya Muslims out of the country, according to a draft document seen by Reuters.

Thousands of the Rohingya fled for Myanmar to Bangladesh on Monday in a new surge of refugees driven by fears of starvation and violence which the United Nations denounced as ethnic cleansing.

The United States and the European Union have been considering targeted sanctions against Myanmar military leaders, though the European bloc sees its options as relatively limited, with no hard-hitting, direct leverage on the ground.

EU foreign ministers will discuss the situation in Myanmar on Oct.16, and their draft joint statement said the bloc "will suspend invitations to the commander-in-chief of the Myanmar/Burma armed forces and other senior military officers".

The text, which will be discussed further by envoys from the 28 EU states on Tuesday and may be modified, said the EU may consider further measures depending on developments in Myanmar but would "respond accordingly to positive developments".

The document confirmed support for an existing EU embargo on arms and equipment "that can be used for internal repression".

It called on Myanmar to discuss repatriating refugees from neighbouring Bangladesh and praised the latter for its role in the crisis, which started when attacks by Rohingya militants on security posts brought a ferocious military response.

Refugees and rights groups say the army and Buddhist vigilantes use killing and arson to drive the Rohingya out of Myanmar. Myanmar rejects accusations of ethnic cleansing.

The EU draft characterised the situation in the most-affected Rakhine State as "extremely serious" and said Kachin and Shan provinces were also "of great concern."

It called on all sides to cease violence, told the military to "end its operations" and protect all civilians equally, as well as calling on Myanmar to allow humanitarian access to the affected regions.

The West has invested politically in Myanmar leader and Nobel peace laureate Aung San Suu Kyi, who has faced scathing international criticism for not doing more to stop the violence.

While the EU feels disillusioned, it also acknowledges Aung San Suu Kyi has little influence over Myanmar's security forces.

The move to punish the army head is largely symbolic as the West is also wary of hurting the wider economy or destabilising already-tense ties between Suu Kyi and the army.

Its leverage on the ground fades compared to that of Myanmar's immediate neighbours, including China.