A dispute between a Muslim gold-shop owner and customers in central Myanmar led to rioting in which at least 10 people died.
President's office director Major Zaw Htay said those hurt on Wednesday in Meikhtila town included a Buddhist monk. A curfew was declared.
An opposition parliament member for the area said a mosque had been burned but the situation was under control by nightfall. "More than 10 people were killed," Win Htein said.
Police had confirmed that two people died - including the Buddhist monk - after they sustained severe burns, with several buildings set alight during the riot.
Occasional isolated violence involving majority Buddhists and minority Muslims in Myanmar has occurred for decades. But its risks were underlined last year when clashes between ethnic Rakhine Buddhists and Rohingya Muslims left about 200 dead and more than 110,000 displaced.
A local resident, who asked not to be named, said he had seen "many dead bodies" after the latest unrest, adding: "The situation is getting worse. The police cannot control the people. There are groups of people on the streets with knives and sticks."
In a brief statement, the US embassy said it was "deeply concerned" about the violence.
Win Htein said there were about 30,000 Muslims in Meikhtila out of a total population of around 80,000, but no similar clashes had happened in his lifetime. "I think it is a consequence of what happened in Rakhine state last year," he added.
Myanmar's Muslims - largely of Indian, Chinese and Bangladeshi descent - account for an estimated 4 per cent of the roughly 60 million population, although a census has not been conducted in three decades. Despite their long history in Myanmar, they have never fully been integrated into the country.
Since violence erupted in Rakhine last year, thousands of Muslim Rohingya boatpeople - including a growing number of women and children - have fled the conflict in rickety boats, many heading for Malaysia.
A former dissident who heads a civic group said the response of the security forces to unrest was often questionable.
"They don't make enough effort to control the situation," Min Ko Naing of the 88 Generation Peace and Open Society group said in Yangon.
An independent team that has conducted an investigation into the violence in Rakhine state is expected to release its much-delayed report this month. Its recommendations on the sensitive topic of what to do with some 800,000 mostly stateless Rohingya Muslims could further inflame tensions in the country.
Additional reporting by Reuters