Riots broke out Tuesday in the small town of Oakkan, around 100 kilometres (60 miles) north of Yangon, after a woman accidentally bumped into a young monk, authorities said, amid acute Buddhist-Muslim tensions after a series of attacks in March.
"A man died in hospital of his injuries this morning," a local police official told AFP, adding that nine others were injured.
Authorities have arrested 18 people after a series of arson attacks on Tuesday evening, president's spokesman Ye Htut said in a Facebook update, adding some 77 homes had been set alight in four villages in a region north of Yangon that saw a wave of conflict two months ago.
Terrified villagers of both faiths said police were not there to protect them when a crowd attacked a local mosque on Tuesday evening in Mie Laung Sakhan village.
"About 200 to 300 people arrived in our village on motorcycles and destroyed the mosque. All the villagers ran away. We were scared and didn't resist. They destroyed until they were satisfied," Soe Myint, 48, a Muslim, told AFP.
The village mosque was seriously damaged and around 10 homes burned, according to an AFP journalist at the scene. No security presence was visible until late morning, when about 30 police arrived.
"We heard rumours that the mob will come and attack again this afternoon. Even we were threatened to be killed. We are also scared. We need security urgently," Than Soe, a Buddhist, told AFP.
A heavy security presence was visible on Wednesday morning in Oakkan, where some 30 shops in the market had been destroyed and a mosque damaged.
Religious unrest has exposed deep fractures in formerly junta-run Myanmar and cast a shadow over reforms under a quasi-civilian regime that took power two years ago.
At least 43 people were killed and thousands left homeless in March in fighting apparently triggered by a quarrel between a Muslim gold shop owner and Buddhist customers in the central town of Meiktila.
Some monks were involved in those clashes, which spread to the region north of Yangon. Others are behind a nationalistic campaign calling for a boycott of Muslim-owned shops.
Muslim residents in Mie Laung Sakhan were urged to hide as the mob descended on their village.
Win Hlaing said local Buddhists had tried to help their Muslim neighbours.
"We have been living together for a long time and have had no problems at all," the 60-year-old told AFP. "Muslims are humans. Buddhists are humans. We all are humans. I do not want this sort of thing to happen."
Last year around 200 people were killed in clashes in Rakhine state between Buddhists and Muslim Rohingya -- a minority treated with hostility by many Burmese, who see them as illegal Bangladeshi immigrants.
Rights groups have accused authorities of standing by during previous attacks on Muslims or actively participating in some cases.
Human Rights Watch last week accused authorities of being involved in "ethnic cleansing" in Rakhine.
The government rejects allegations it is complicit in the violence.
An official report into the Rakhine unrest this week suggested doubling the security presence in the state, and recommended keeping the communities apart as a temporary measure to prevent further violence.
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What's happening in Myanmar is an alarming indication for world peace! Unfortunately it shows clearly double standards of US, UN, NATO and all other powers which are labelled as peace keeping forces! Where is Security Council? OIC is only made to host Muslim Leaders to eat sweets and drink tea or Qahwa?