Anti-coup protesters run after seeing police and soldiers arrive to disperse their demonstration in Yangon. AP

The clash came as the junta, in an apparent setback for an attempt by the Association of Southeast Asian Nations (ASEAN) to end Myanmar's turmoil, said it would "positively" consider the bloc's suggestions made at a weekend meeting in Indonesia.

Southeast Asian leaders said on the weekend they had reached a consensus with the junta on steps to end violence and promote dialogue between the rival Myanmar sides.

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The Karen National Union (KNU), Myanmar's oldest rebel force, said it had captured the army camp on the west bank of the Salween river, which forms the border with Thailand in the area.

Villagers on the Thai side of the river said heavy gunfire started before sunrise. Video posted on social media showed flames and smoke on the forested hillside.

Anti-coup protesters flash the three-finger salute during a protest against the military coup in Yangon. AP

KNU forces had taken the outpost at around 5am to 6am (2230 to 2330 GMT), the group's head of foreign affairs, Saw Taw Nee, told Reuters.

He said the camp had been occupied and burned down and that the group was still checking on deaths and casualties. The spokesman said there had been fighting elsewhere too, but did not give details.

The Karen Information Center media group said the army base had been overrun. It said villagers had seen seven soldiers running away.

Myanmar's army made no immediate comment. It historically proclaimed itself the one institution that can keep together the ethnically diverse country of more than 53 million people, though much of Myanmar has rallied in opposition to its coup.

The army base at the Thai border had been largely surrounded by KNU forces and food had run short there in recent weeks, said Thai villagers who had contact with the soldiers.

A Thai official in Mae Hong Son province said one person had been lightly wounded in Thailand during the fighting.

The KNU agreed to a ceasefire in 2012, ending its insurgency for autonomy that began shortly after Myanmar's independence from Britain in 1948.

But its forces have clashed with the army since the latter seized power and cut short a decade of democratic reforms that had also brought relative peace to Myanmar's borderlands.

Fighting has also flared in the north and west, where the Irrawaddy news site said 13 security forces were killed in clashes over the past few days.

Reuters