Authorities have gradually ratcheted up their tactics against a massive and largely peaceful civil disobedience campaign demanding the return of ousted civilian leader Aung San Suu Kyi.

Saturday marked the deadliest day yet in more than two weeks of nationwide street demonstrations when security forces fired upon a rally in Mandalay, sending the crowd fleeing in fear.

UN Secretary General Antonio Guterres condemned the use of "deadly violence" in the melee, which emergency workers said had killed one teenager and wounded dozens more.

"The use of lethal force, intimidation & harassment against peaceful demonstrators is unacceptable," Guterres wrote on Sunday.

The confrontation began when security forces in Mandalay, the country's second-largest city and cultural capital, attempted to raid a shipyard and detain port staff on strike to protest the army takeover.

Medical rescue workers said the troops used live rounds, rubber bullets and tear gas against a crowd of people who had started flinging rocks in an effort to stop the arrests.

"Two people were killed," said Hlaing Min Oo, the chief of a Mandalay-based volunteer emergency rescue team.

Another emergency worker on the scene, who asked not to be named for fear of reprisals, confirmed the death toll.

Graphic video circulated on Facebook showing a teenaged victim, splayed on the ground and bleeding from his head as a bystander placed a hand on his chest to feel for a heartbeat.

Hlaing Min Oo said another 30 were wounded, with half of the injuries from live rounds.

Local media reported more than a dozen people were arrested after the clash.

"They beat and shot my husband and others," one resident told AFP. "He was standing on the side and watching the protest but the soldiers took him away."

Myanmar emerged from its seventh consecutive overnight internet blackout on Sunday, a measure imposed by the junta after neighbourhoods mobilised watch groups to guard against evening arrests.

A funeral was to be held in the capital Naypyidaw for a young protester who died on Friday after being shot in the head during a rally last week.

Mya Thwate Thwate Khaing, who turned 20 last Thursday as she lay unconscious in a hospital bed, has since become a potent symbol of the campaign against military rule.

Demonstrators have hoisted her photos high on street marches and unfurled a huge banner of artwork from a bridge in Yangon depicting the moment she was shot.

Vigils for the grocery store worker were held across the commercial hub on Saturday, with protesters lighting candles and laying roses by a banner with her picture.

- Hundreds arrested -

Much of Myanmar has been in uproar since troops detained Suu Kyi on February 1, with massive street demonstrations seen in major cities and isolated villages across the country.

The new junta has so far remained impassive in the face of relentless international condemnation, with the US, Britain and Canada all unveiling sanctions targeting the country's top generals.

European Union foreign ministers will meet Monday to discuss their own measures against the regime.

The bloc's foreign policy chief Josep Borrell urged security forces to "immediately stop violence against civilians" on Saturday after the violence in Mandalay.

Nearly 570 people have been detained since the coup, according to the Assistance Association for Political Prisoners monitoring group.

Among those targeted have been railway workers, civil servants and bank staff, who have walked off their jobs as part of the anti-coup campaign.

Authorities have maintained that their methods to disperse protesters are lawful.

A military spokesman said this week that one police officer had died in Mandalay after another clash there.

Suu Kyi -- who has not been seen since she was detained in a dawn raid -- has been hit with two charges by the junta, one of them for possessing unregistered walkie-talkies.

Her hearing is expected on March 1.