Myanmar has been consumed by civil war since the military staged a coup five years ago, provoking armed resistance from democracy activists and ethnic minority factions that have long held sway in the nation's fringes.

The western coastal state of Rakhine is among the worst-hit regions. Controlled almost entirely by the ethnic minority Arakan Army (AA), it has been blockaded by the junta and pummeled with regular air strikes.

The junta's air force hit the village of Yoe Ngu in Ponnagyun township, around 33 kilometres (20 miles) northeast of state capital Sittwe on Tuesday, according to the AA and a local volunteer group.

A Myanmar military spokesman could not be reached for comment.

AA statements listed the names of 17 "innocent civilians", including three children, killed in the strike on a marketplace around 2:00 pm (0730 GMT) on Tuesday. It said 15 more people had been wounded.

Pyae Phyo Naing, chairman of the Ponnagyun Youths Association, said: "In our list, there are 18 confirmed deaths and 16 injured people."

Arriving at the scene after the strike, he described its aftermath as "really bad, four or five buildings were burnt down and many buildings were destroyed".

"Some people were crying, while many dead bodies were scattered over the area," the 23-year-old added.

"Some people were running away from the scene as there were also houses still burning when we arrived."

Aid groups regularly sound alarms over the spiralling crisis in Rakhine, which borders Bangladesh.

The military blockade on top of the conflict and recent sweeping cuts to international aid have driven a "dramatic rise in hunger and malnutrition" in the state, the World Food Programme warned last year.

While the military has been accused of atrocities in the state, the AA has its own track record of rights abuses, according to monitors who have tallied incidents of alleged abduction, torture and execution.

The AA has emerged as one of the most powerful factions opposing the junta's rule -- pushing troops to a handful of encircled positions in Rakhine, including Sittwe.

The military has been able to hold out thanks to supply airlifts and strikes carried out by its fleet of Chinese- and Russian-made jets.