The Southeast Asian country has been in turmoil since the army's power grab in 2021, and a subsequent crackdown on dissent has sparked fighting across swathes of the nation while tanking the economy.

Junta chief Min Aung Hlaing acknowledged that more than a third of the country's townships are not under full military control, in comments reported by state media on Wednesday.

The admission came on the second anniversary of the putsch, as the National Defence and Security Council agreed to prolong the state of emergency declared when the generals toppled Aung San Suu Kyi's government.

The "state of emergency will be extended for another six months starting from February 1", Acting President Myint Swe was quoted as saying by state media.

Extending the state of emergency pushes back the date by which elections must be held, according to the country's constitution.

The army ruled Myanmar for decades after independence from Britain in 1948, and dominated the country's economy and politics even before the coup.

And while Min Aung Hlaing reiterated a pledge to work towards nationwide elections, he made it clear the military would maintain its prominent role.

The military will always be the "guardian of the interests of the state and people... under whichever government comes," he said, according to MRTV.

- Deserted streets -

The announcement came as streets emptied and shops closed across Myanmar in protest on the anniversary, with Western powers launching a fresh broadside of sanctions against the generals.

Streets in the commercial hub Yangon were largely deserted from late morning, AFP correspondents said, after activists called for people across the country to close businesses and stay indoors.

Roads leading to the famous Shwedagon pagoda -- a Buddhist shrine that dominates Yangon's skyline and is usually thronged by worshippers -- were largely deserted.

Around 200 supporters of the military marched through Yangon's historic downtown in the early afternoon, while in Bangkok some 400 anti-junta protesters staged a noisy rally outside the Myanmar embassy.

The empty roads were in contrast to the huge protests seen in the weeks after the coup in 2021, which petered out in the face of a bloody crackdown by security forces.

Min Aung Hlaing said that while the street demonstrations were gone, "violence is still here", accusing anti-junta groups of hampering election plans.

"Terrorists are terrorising, disturbing, killing and destroying," he said, according to MRTV.

- 'Unrest and violence' -

Phil Robertson of Human Rights Watch told AFP the extension shows "Min Aung Hlaing only cares about holding tight to power, and the rights and suffering of the Burmese people be damned."

Burma is the old name for Myanmar.

The military justified its February 1, 2021 power grab with unsubstantiated claims of widespread fraud in elections that democracy figurehead Suu Kyi's party won in a landslide.

The state of emergency was due to expire at the end of January and the military had been widely expected to announce on Wednesday that it would prepare for the polls.

The United States, Canada and Britain announced a new round of sanctions on the anniversary, targeting members of the junta and junta-backed entities. So did Myanmar's former colonial ruler Britain, and Australia.

More than 2,900 people have been killed in the military's crackdown on dissent since it seized power and more than 18,000 have been arrested, according to a local monitoring group.

The junta recently wrapped up a series of closed-court trials of Suu Kyi, 77, jailing its longtime enemy for a total of 33 years in a process rights groups have slammed as a sham.

"It is clear that the junta's goal is for her to die in prison," French lawyers Francois Zimeray and Jessica Finelle, who represent Suu Kyi, said in a statement.

"The main wish for 2023 is we want freedom and to go back home," Thet Naung, an activist in northern Sagaing region, where the military and anti-coup fighters have regularly clashed, told AFP.

"We have gone through many difficulties. We wanted to be happy and live freely but we lost everything. We have spent most of our time in jungles and stayed away from cities."