The BBC has obtained police video showing officers standing by while Buddhist rioters attacked minority Muslims in the Burmese town of Meiktila.
The footage shows a mob destroying a Muslim gold shop and then setting fire to houses. A man is seen on fire.
It was filmed last month, when at least 43 people were killed in Meiktila.
Meanwhile the EU is expected to decide whether to lift sanctions imposed on Burma, in response to recent reforms.
It is thought likely that despite concerns about the treatment of minorities, Brussels will confirm that the sanctions, which were suspended a year ago, are now permanently lifted.
UK Foreign Secretary William Hague has said this is the right time to permanently lift all sanctions against Burma, except the arms embargo.
Speaking at the EU meeting of foreign ministers in Luxembourg, Mr Hague said he had spoken to opposition leader Aung San Suu Kyi, who agreed with lifting the sanctions.
He did not comment directly on pictures obtained by the BBC which show Burmese police looking on as Buddhist mobs attack Muslims.
The sanctions include the freezing of assets of more than 1,000 Burmese companies, travel restrictions on officials, and a ban on EU investment in many areas. However, an arms embargo is expected to remain in place.
The move is a response to political change under President Thein Sein, who came to power after elections in November 2010. His administration has freed many political prisoners and relaxed censorship.
Ms Suu Kyi, who was under house arrest for many years, leads a pro-democracy opposition which has a small presence in parliament.
Some human rights groups, however, have warned that sanctions should not be lifted until the government addresses issues including recent violence against Muslims.
The video from Meiktila, in Mandalay Region, is remarkable both for the comprehensive way it documents the violence and because much of it was shot by the Burmese police themselves, the BBC's Jonah Fisher reports from Singapore.
In the sequence where policemen look on as a man rolls on the ground having been set on fire, someone in the watching crowd is heard to say: "No water for him - let him die."
Another sequence shows a young man attempting to flee and getting caught, after which he is beaten by a group of men which includes a monk.
Finally he is struck with a sword strikes him and left on the ground, apparently dead.
Only in one shot are the police seen escorting Muslim women and children away from their burning homes.
The footage corroborates eyewitness testimony. A row at a Muslim-owned gold shop on 20 March was said to have started the violence, when a dispute involving a Buddhist couple escalated into a fight.
This was followed by an attack on a Buddhist monk who later died in hospital. News of that incident appeared to have sparked off sustained communal violence.
The violence then spread to other towns and led to curfews being imposed. There were reports of mosques and houses being torched in at least three towns.
The gold shop's owner, his wife and an employee were convicted of theft and assault on 12 April and jailed for 14 years. Dozens of other Muslims and Buddhists are said to be under investigation.
Violence between Buddhists and Muslims erupted in another part of Burma, Rakhine state, last year following the rape and murder of a young Buddhist woman in May.
Clashes in June and October resulted in the deaths of about 200 people. Thousands of people, mainly members of the stateless Rohingya Muslim minority, fled their homes and remain displaced.
On Monday, the New York-based organisation Human Rights Watch (HRW) presented a report containing what it said was clear evidence of government complicity in ethnic cleansing and crimes against humanity against Muslims in Rakhine state.
It said security forces stood aside or joined in when mobs attacked Muslim communities in nine townships, razing villages and killing residents.
It said HRW also discovered four mass grave sites in Rakhine state, which it said security forces had used to destroy evidence of the crimes.
However, the allegations were rejected by Win Myaing, a government spokesman for Rakhine state, AP news agency reported.
HRW investigators didn't "understand the situation on the ground," he said, adding that the government had no prior knowledge of the impending attacks, and had deployed forces to quell the unrest.