SITTWE, Myanmar (Reuters) - Around 120,000 displaced people - mostly Rohingya Muslims - in camps in Myanmar’s Rakhine state are not receiving food supplies or healthcare after the U.N. and aid groups suspended operations following government accusations of supporting insurgents.

A group of Rohingya refugee people walk in the water after crossing the Bangladesh-Myanmar border in Teknaf, Bangladesh, September 1, 2017. REUTERS/Mohammad Ponir Hossain

Nearly 400 people have died in fighting in the far north of the state after Rohingya militants attacked police posts and an army base a week ago, provoking a major army counteroffensive.

The impact from the conflict has now spread, including to the state capital Sittwe further south, where some 90,000 Rohingya have lived in camps since an outbreak of communal violence rocked the city in 2012, killing nearly 200 people.

A further 30,000 Rohingya are housed in camps elsewhere in the state, while a small number of ethnic Rakhine Buddhists displaced in the 2012 violence also live in separate camps.

“As a result of the disruption of activities in central Rakhine state, many people are currently not receiving their normal food assistance and primary healthcare services have been severely disrupted,” said Pierre Peron, a spokesman for the United Nations’ Office for the Coordination of Humanitarian Affairs (OCHA).

The U.N. and international aid groups had already evacuated all “non-critical” staff from the north of the state amid intensifying fighting and after the office of national leader Aung San Suu Kyi repeatedly published pictures of World Food Programme (WFP) energy biscuits allegedly found at an insurgent camp. Suu Kyi’s office also said it was investigating aid groups’ support for the insurgents in one incident.

Now contractors working for the WFP, a U.N. agency, have refused to carry food to the camps in Sittwe and elsewhere.

Staff with international aid groups who run clinics inside the large, densely populated camps have also been afraid to show up for work, leading to the closure of facilities, U.N. sources and aid workers told Reuters.

Local staff were afraid of being intimidated by Rakhine Buddhist hardliners, and some worried about being attacked by Muslims, the sources said.

Sanitation is also a major problem - contractors cleaning latrines in the camps have also refused to work and the latrines are overflowing in the monsoon rains, increasing the risk of cholera and other waterborne diseases, they said.

COMMUNAL TENSIONS

The treatment of Myanmar’s roughly 1.1 million Rohingya, who have long complained of persecution in Buddhist majority Myanmar, is the biggest challenge facing Suu Kyi.

The top U.N. human rights official, Zeid Ra’ad al-Hussein, has criticized Suu Kyi’s office for “irresponsible” suggestions that aid agencies may have assisted Rohingya militants calling themselves the Arakan Rohingya Salvation Army (ARSA).

“#WFP Aid & #ARSA terrorists : #Myanmar Govt asking #WFP, Aid for civilian or terrorists? #Rakhine #Myanmar,” said Suu Kyi’s spokesman, Zaw Htay, in a tweet on Thursday.

Tin Maung Swe, secretary of the Rakhine state government, confirmed that workers have refused to work for the WFP.

“Laborers who carry the WFP food bags don’t want to contract with them any more. People who have made contract with WFP refused to work for them,” he said. He added that residents were “disgusted” with the organization following the government’s accusations.

Tin Maung Swe also said that the government was trying to find “a different way to support the organization”.

Rakhine Buddhist leaders have long bemoaned the presence of international agencies, who they accuse of favoring the Rohingya. Aid offices in Sittwe were sacked during 2014 riots.

The discovery at a suspected militant camp on July 30 of WFP-branded biscuits intended for malnourished children had further stoked tensions even before last week’s attacks.

Accusations against the U.N. have been spread on social media by nationalist hardliners, stoking fears of another outbreak of communal violence in a state that has long been divided along religious and ethnic lines.

International aid agencies operating in Myanmar issued a statement on Thursday condemning the insurgent attacks and subsequent violence, and urging “all stakeholders to cease the spread of misinformation”.

TALKS SCHEDULED

The OCHA’s Peron said the disruption was already being felt.

“Humanitarian aid normally goes to these vulnerable people for a very good reason, because they depend on it,” he said.

In addition to the closure of camp clinics, Rohingya who have been referred to the main hospital in Sittwe for more serious complaints were finding it hard to travel there, said the hospital’s chief doctor Kyaw Naing Win.

“There have been some constraints for them to come to the hospital because of the tighter security control after recent clashes,” he said, but added the hospital did not discriminate against them.

Kyaw Naing Win said he arranged for the state government to provide security for 17 Muslim patients who were discharged from the hospital on Thursday.

Even before the recent violence Rohingya camp residents faced severe restrictions on their movements around Sittwe.

Talks between government and relief agencies are scheduled for next week, aid group sources told Reuters. Possible solutions might include the government providing security escorts for food convoys, they added.

(This story has been refiled to remove extraneous words in paragraph 6)