The fighting has killed at least four people and forced 2,000 more to flee since it started on Thursday, according to the U.S. Campaign for Burma.

Government troops in Myanmar have attacked one of the country’s powerful northern militias with artillery in a bid to force rebel fighters from a strategic region where China is constructing major hydropower plants.

The fighting has killed at least four people and forced 2,000 more to flee since it started on Thursday, according to the U.S. Campaign for Burma.

The violence is some of the most serious in Myanmar since the country’s military junta handed power to a civilian government in March, a move critics say is a simply a proxy for continued military rule. The new government has said it wants to improve ties with ethnic minorities that have waged rebellions along the border, but the latest fighting underscores the deep tension that remains.

The rebels involved in the most recent clashes belong to the Kachin, one of Myanmar’s sizable ethnic minorities. Those groups have struggled for decades to win more autonomy, but their efforts have routinely been met by military suppression.

Kachin military commander Gwan Maw told U.S.—funded Radio Free Asia on Monday that the fighting in northern Myanmar’s Momauk region, near the Chinese border, could spread and possibly escalate into civil war if the government refused to negotiate an end to it with the Kachin Independence Organization.

Though the fighting could worsen, it is unlikely to engulf the repressive nation.

The 8,000—strong Kachin militia reached a peace deal with the country’s former ruling junta in 1994, but the truce broke down last year after the militia rejected a call by the government to become border guards under army leadership. The junta made the appeal ahead of last November’s elections, Myanmar’s first in 20 years, which paved the way for a nominally civilian government to take over.

The Campaign for Burma, a Washington—based lobbying group that uses Myanmar’s former name in its title, said hundreds of Myanmar government troops deployed to the northern region to force out Kachin forces after they refused to abandon a strategic base. The base is located near a major hydropower project that being built by China’s state—owned China Datang Corporation, the group said.

A three—hour gun battle on Thursday killed three soldiers as well as one rebel fighter, who was allegedly captured and beaten to death by government troops, the said.

Skirmishes erupted again on Saturday and lasted until at least Monday, with government forces shelling the area with artillery, Maw said. There were no immediate reports of fighting on Tuesday.

The Kachin military commander said the violence took place about 20 miles (30 kilometers) from the China border, and schools in the region have closed down. The Campaign for Burma said at least 2,000 people have fled their homes.

The area is virtually inaccessible to outside observers, and the government has yet to comment on the fighting.

Myanmar’s central government has tenuous control of many parts of the country where minority groups -many of which maintain their own militias - are strongest. It has reached cease—fire agreements with 17 ethnic minority rebel militias since 1989 and most have been allowed to keep their weapons and maintain some autonomy over their areas.

Despite sanctions against its government, Myanmar received a record $20 billion of foreign investment pledges in the last financial year, an extraordinary amount that tops total foreign direct investment over the past two decades combined.

Neighbouring China, with $8.27 billion, accounted for 41 percent of the commitments in the financial year that ended in March, much of it poured into hydropower projects.

The U.S. and European Union have imposed economic sanctions on Myanmar for its poor human rights record and failure to make democratic reforms. Sanctions, including banning U.S. companies from investing in Myanmar and banning Myanmar exports to the United States, started in 1997.

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