Nearly 50 soldiers have been killed in a week of fighting between government troops and Kokang ethnic rebels in Myanmar, state media report.
The Global New Light of Myanmar newspaper said air strikes had been used in the response to the flare-up in Shan state, near the Chinese border.
The BBC's Myanmar correspondent, Jonah Fisher, says it is the heaviest fighting in at least two years.
It comes as the government tries to sign a peace deal with rebel groups.
There are reports that thousands of people have been leaving the area to escape the fighting.
China said on Tuesday that some people had crossed over into its southern Yunnan province, and that they were being looked after.
Analysis: Jonah Fisher, Myanmar correspondent
The Kokang are a Han Chinese ethnic group, and their armed wing a remnant of the Burmese Communist Party which fragmented in 1989.
For years they have run a largely autonomous strip of land on Myanmar's north-eastern border with China.
This dramatic upsurge in fighting appears to have been triggered by the return of one of their leaders - Phone Kya Shin - from five years of exile in China.
In 2009, Phone Kya Shin was forced to flee by Burmese troops - but he has now returned promising to restore the rights of the Kokang people.
The newspaper said there had been at least 13 separate clashes in the area in recent days with the Kokang rebels, known as the Myanmar National Democratic Alliance Army (MNDAA).
Rebels attacked army bases close to Laukai, capital of the Kokang area of Shan state, it said. At least 47 soldiers were killed and more than 70 injured.
The report did not indicate any rebel casualty figures, but the Irrawaddy newspaper, based in Thailand, quoted the general secretary of MNDAA as saying two rebels had died and one was injured.
Htun Myat Lin said up to 10,000 people had fled as the military carried out air strikes using jets and helicopters.
Myanmar has been trying for decades to contain conflicts involving ethnic rebel movements seeking greater autonomy, largely in Shan and Kachin states.
President Thein Sein has been pushing for peace deals with these groups, and while many have come into the political fold sporadic outbreaks of violence have continued.
On Thursday, he held talks with the leaders of about a dozen armed groups in the capital, Nay Pyi Taw, including the MNDAA.
But they ended with no deal reached beyond a commitment to negotiate further.