Myanmar on Tuesday declared a state of emergency in a conflict-torn border region, where ferocious fighting between the army and ethnic rebels has sent thousands fleeing airstrikes and fierce gun battles.

Civilians have come under fire in the deadly clashes between the army and Kokang rebels in Shan state, local officials said, in fighting that has uprooted tens of thousands in the past week and sent a flood of refugees into China, which has voiced alarm over the escalating bloodshed.

"A serious situation has developed that has put people's lives at risk, so a state of emergency has been declared starting from today," the ministry of information said in a statement outlining the measures in the Kokang region of Shan state, where conflict has raged since February 9.

In a separate announcement it said Myanmar's army chief was in full control of "rule of law and stability" in the area.

Sai Shwe Win, an official with the Lashio fire department, said dozens of civilians crammed into a truck came under attack as they tried to escape fighting in the area Tuesday morning, with one killed and another injured.

A monastery in the Shan town of Lashio, some 140 kilometres (85 miles) south of the conflict zone, has become a temporary shelter for thousands who have fled the violence, most with little more than a few plastic bags of belongings.

On the Chinese side Beijing says it has stepped up border controls after some 30,000 fled into its Yunnan province.

- Civilians attacked -

Streams of civilians continued to arrive late into Tuesday night, bringing reports of continued heavy clashes in the remote hills along the frontier.

One 40-year-old woman, looking haggard and exhausted after fleeing the violence with her three-year-old son on Tuesday, said she had heard gunfire as the family made their escape.

"Every night we were afraid. I trembled with fear," she told AFP, asking not to be named, as she picked through a pile of clothes donated by local people on the monastery compound.

Clashes between the ethnically Chinese Kokang and soldiers have centred on the Kokang settlement of Laukkai, a now near-deserted border town.

The military has launched a counter-offensive against rebels who tried to capture Laukkai in a series of brazen assaults that left nearly 50 soldiers dead.

Dozens have now been killed on both sides in raging street battles as the military moved to retake the town and flush out rebel holdouts, although ascertaining exact casualty figures is difficult.

Many of those who have fled into Lashio are temporary workers who have then made their way to homes in other parts of Myanmar.

But scores of people are seeking refuge in the Lashio monastery's cramped dormitory.

"We don't know where to go or what to do," Thein Htike Soe, 33, who fled with his wife from their home near Laukkai after seeing several airstrikes, told AFP.

- 'Don't give an inch' -

It is unclear what sparked the resurgence of conflict with Kokang rebels, which has undercut government efforts to agree a nationwide ceasefire with the country's patchwork of ethnic armed groups.

Myanmar's President Thein Sein "vowed not to lose an inch of Myanmar's territory" the state-backed Global New Light of Myanmar reported early Tuesday.

Officials have blamed the Kokang rebel leader Phone Kya Shin for stoking the violence, and called on Beijing to rein in any local officials who might be helping the group on its side of the border.

Chinese foreign ministry spokeswoman Hua Chunying called on conflicting parties in Myanmar to "prevent the situation from escalating".

The Kokang region -- known for its opium production -- had been relatively calm since 2009, when a huge assault by Myanmar's army against the Kokang rebels saw tens of thousands of people flood over the border into China.

Myanmar has been plagued with sporadic conflicts in its border regions since independence in 1948.

The latest fighting has drawn in rebels from other nearby armed groups including the Ta'ang National Liberation Army and the powerful Kachin Independence Army.

But the perception that the Kokang are Chinese means that they are seen as "outliers" by most of Myanmar's armed ethnic minority groups, said Nicholas Farrelly of Australian National University.

"Kokang is different because of its reputation for drug production, the Chinese ethnicity of its leaders, and their recent history of fighting back. All of those factors come into play any time bullets start flying up there," he told AFP.