NAYPYITAW (Reuters) - A Myanmar state-run newspaper on Saturday corrected a report that a U.N. settlement program, UN-Habitat, had agreed to help build housing for people fleeing violence in the west of the country, where an army operation has displaced hundreds of thousands.

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The development underscores tension between Myanmar and the United Nations, which in April criticized the government’s previous plan to resettle Rohingya Muslims displaced by last year’s violence in “camp-like” villages.

More than 600,000 have crossed to Bangladesh since Aug. 25 attacks by Rohingya militants sparked an army crackdown. The U.N. says killings, arson and rape carried out by troops and ethnic Rakhine Buddhist mobs since then amount to a campaign of ethnic cleansing against the Rohingya.

The state-run Global New Light of Myanmar (GNLM) newspaper said it had “incorrectly stated that UN-Habitat had agreed with the Union government to provide technical assistance in building housings for displaced people in northern Rakhine.”

“Union officials say that the issue is still under negotiation. The GNLM regrets the error,” said the newspaper.

In its report on Thursday, the daily said UN-Habitat had agreed to provide technical assistance in housing the displaced and the agency would work closely with the authorities to “implement the projects to be favorable to Myanmar’s social culture and administrative system”.

But the U.N. told Reuters in an email that no agreements had been reached “so far” after the agency’s representatives attended a series of meetings with Myanmar officials this week in its capital Naypyitaw.

Myanmar leader Aung San Suu Kyi has pledged that anyone sheltering in Bangladesh who can prove they were Myanmar residents can return, but it remains unclear whether those refugees would be allowed to return to their homes.

Rohingya who return to Myanmar are unlikely to be able to reclaim their land, and may find their crops have been harvested and sold by the government, according to Myanmar officials and plans seen by Reuters.

Buddhist-majority Myanmar in August suggested that U.N. agencies such as the World Food Programme have provided food to Rohingya insurgents, adding to pressure on aid groups which had to suspend activities in Rakhine and pull out most of their staff.

Thousands of refugees have continued to arrive cross the Naf river separating Rakhine and Bangladesh in recent days, even though Myanmar says military operations ceased on Sept. 5.