Myanmar's military is carrying out a sustained offensive involving fighter jets to regain control of a key town from an armed ethnic minority group, its fighters and residents said on Wednesday.

The Arakan Army moved into Pauktaw, a town of 20,000 people close to a crucial deepwater port in the capital of western Rakhine state, on November 15.

It opened a new front in an offensive by an alliance of ethnic minority groups across northern Myanmar that has shocked the nation's junta, cut trade routes to neighbouring China and led to more than 330,000 people being displaced since last month.

Pauktaw has become one of the key battlegrounds, and residents contacted by AFP on Wednesday reported heavy battles in and around the town, which is 25 kilometres (16 miles) from Sittwe, the state capital.

"They (the junta) have been firing heavy weapons at the town continuously," one resident told AFP by phone, requesting anonymity for security reasons.

"Yesterday a jet fighter dropped two bombs that started a fire," said the resident who said they were sheltering in a nearby village, adding the blaze was still burning.

AFP has reported fighting in Pauktaw over the past two weeks. But the accounts from the residents, as well as a statement from the Arakan Army (AA), provided the most detailed accounts of the battle for control of the town.

A resident of Sittwe said the military was shelling Pauktaw from bases around Sittwe.

"They are firing artillery from Sittwe towards other towns especially Pauktaw every day, day and night," a resident told AFP, also requesting anonymity.

"We can't sleep well at night as the sound of shelling wakes us up at midnight," another resident said.

Footage released on AA's Telegram account showed plumes of smoke rising from Pauktaw and included the sound of gunshots.

The AA said it was "rescuing" civilians still trapped.

The United Nations said 18,000 residents of Pauktaw have already fled the town.

Junta spokesman Zaw Min Tun on Tuesday said the military was engaged in fighting around Pauktaw but did not give details.

The AA has for years fought an on-off war for the autonomy of the state's ethnic Rakhine population in their home near the Bangladesh border.

It is one of dozens of armed ethnic minority groups that have battled Myanmar's military since independence from Britain in 1948.

Some groups want greater autonomy while others simply want the right to run the lucrative trade in jade, drugs and timber in their territory.

Last month, the AA joined forces with the Myanmar National Democratic Alliance Army (MNDAA) and the Ta'ang National Liberation Army (TNLA) in an offensive against the junta across northern Shan state, which borders China.

Analysts say the current fighting is the biggest military challenge to the junta since it seized power in a 2021 coup.

Almost 200 civilians, including children, have been killed since the offensive began on October 27, according to the UN.

AFP