Authorities on Friday revised down to 64 the number of people killed in six days of unrest in western Myanmar, after security forces opened fire to break up violence between Buddhists and Muslims.
A spokesman for Rakhine State, where the fighting has taken place, had earlier put the death toll at 112, but later scaled that back, blaming "clerical errors".
Still, the United Nations warned that Myanmar's fledgling democracy could be "irreparably damaged" by the clashes, which come just five months after communal unrest killed more than 80 people and displaced at least 75,000 in the same region.
Buddhist ethnic Rakhines told Reuters they were shot by security forces struggling to impose order on Rakhine State, where violence with Rohingya Muslims has engulfed several districts, including Kyaukpyu where a multibillion-dollar China-Myanmar pipeline starts.
The violence is testing the reformist government's ability to contain ethnic and religious tensions suppressed during nearly a half century of military rule that ended last year.
"The fabric of social order could be irreparably damaged and the reform and opening-up process being currently pursued by the government is likely to be jeopardised," a spokesman for U.N. Secretary-General Ban Ki-moon said.
"The widening mistrust between the communities is being exploited by militant and criminal elements to cause large-scale loss of human lives."
At least 2,000 houses and eight religious buildings had been destroyed, according to state media. Nearly 100 people have been wounded, it said.
A Reuters journalist spoke to Rakhine people treated for bullet wounds and other injuries at a tiny, ill-equipped hospital in Kyauktaw, a town north of the state capital, Sittwe. One man died soon after arriving.
The military opened fire to prevent Rakhine villagers on two boats from storming a Rohingya Muslim community, said Aung Kyaw Min, a 28-year-old Rakhine from Taung Bwe with a bullet in his leg. "I don't know why the military shot at us," he said. Two people died and 10 were wounded, said the villagers.
In a separate incident on Thursday, security forces shot at a crowd of Rakhine protesters on Kyauktaw's outskirts, killing two and wounding four, said Hla Hla Myint, 17, whose forehead was grazed by a bullet.
The shooting is a sign that the military, which has been accused in the past of siding with Buddhists, is getting tougher following international criticism that Myanmar's new government was doing too little to protect Muslim Rohingyas.
There were widespread unconfirmed reports of razed and burning homes, gunfights and Rohingya fleeing by boat, but access to Rakhine State was restricted and information hard to verify.
The United States, which has been lifting sanctions on Myanmar as relations improve with its quasi-civilian government, said it was deeply concerned over the violence and urged all parties to show restraint and halt attacks.
In Yathedaung, a town northwest of Sittwe, security forces opened fire in a Rohingya district and about 10 houses were burned, residents told Tun Min Thein of the Wan Lark foundation, which helps ethnic Rakhine Buddhists.
Earlier in the week, about 800 houses were burned down around Kyaukpyu, 120 km (75 miles) south of Sittwe.
The area is crucial to China's most strategic investment in Myanmar: twin pipelines that will take oil and gas from Kyaukpyu on the Bay of Bengal to China's energy-hungry western provinces.
"China and Myanmar are friendly neighbours," said Chinese Foreign ministry spokesman Hong Lei when asked on Friday about possible threats to the pipeline projects. "We hope that Myanmar can remain stable."
Rohingyas are officially stateless. Buddhist-majority Myanmar's government regards the estimated 800,000 Rohingyas in the country as illegal immigrants from Bangladesh and denies them citizenship. Bangladesh has refused to grant Rohingyas refugee status since 1992.
It was unclear what set off the latest arson and killing that started on Sunday. In June, tension flared after the rape and murder of a Buddhist woman that was blamed on Muslims, but there was no obvious spark this time.
Rights groups such as Amnesty International have called on Myanmar to amend or repeal a 1982 citizenship law to end the Rohingyas' stateless condition.
In Washington, the State Department has urged Myanmar to grant full humanitarian access to the affected areas, launch a dialogue aimed at reconciliation, and open investigations into the violence.