Yangon - Myanmar police shot dead seven demonstrators and 12 were injured in troubled Rakhine State, after a local gathering celebrating an ancient Buddhist Arakan kingdom turned violent.

The demonstrators gathered late on Tuesday in Mrauk U township in the northern part of Rakhine to mark the end of the Arakan kingdom, the secretary of the Rakhine state government, Tin Maung Swe, told Reuters.

The violent demonstration underscores the challenges facing Myanmar leader Aung San Suu Kyi in a country where dozens of ethnic groups have been clamouring for autonomy since independence from Britain in 1947.

Some 4 000 people surrounded a government building after the annual ceremony marking the demise of the Arakan kingdom over 200 years ago, Tin Maung Swe said. Organizers did not seek approval from local authorities for the gathering, he said.

"The police used rubber bullets initially but the crowd didn't leave. Finally the security members had to shoot. The conflict happened when some people tried to seize guns from the police," he said.