The Burmese government is reported to have ordered the military to stop operations against ethnic Kachin rebels in the north.
Officials said President Thein Sein had told the army to shoot only in self-defence against forces of the Kachin Independence Army (KIA).
Fighting has continued in the region since a truce broke down in June in a strategically important area near the Chinese border.
Thousands of refugees have fled.
The nominally civilian government has taken a number of steps towards reconciliation in recent months, including easing censorship and releasing some political prisoners.
In a highly unusual move, the chief minister of Kachin state read out a communique which he said was from President Thein Sein to the army chief of staff.
He said that all military commands in the area had been sent the president's instruction to stop offensive action.
The government recently signed a deal with another rebel group in Shan state further south.
US Secretary of State Hillary Clinton said on a recent visit to Burma that Washington wanted an end to decades of fighting with rebel groups before it normalises relations.
Burma accused the Kachin rebels of starting the latest round of fighting near the Chinese border following the collapse of a truce that was signed 17 years ago.
The government said the army needed to protect big hydro-power projects in the area which supply electricity to China.
The KIA opposes the China-backed power schemes, saying they cause environmental damage and social disruption, including the relocation of some communities.
It blamed government forces for the clashes.
The Burmese government has taken steps this year to improve relations with the United States and other Western countries.
The US has offered encouragement for the government's reform programme but says it must go further towards democracy and respect for human rights.