Myanmar troops have captured a key strategic outpost from rebels in the northern Kachin state, according to rebels, as the government criticised the US over its concerns about the escalating violence.

On Saturday the Myanmar foreign ministry rebuked a US embassy statement, which was issued on Thursday and said the US "strongly opposes the ongoing fighting", had implied the army was the sole aggressor.

Myanmar said the US statement "could cause misunderstanding in the international community", in a response printed in the state-run English language newspaper New Light of Myanmar.

Bloody unrest has continued despite a government announcement of a unilateral ceasefire earlier this month, with fighting edging ever closer to the rebels' headquarters in the busy town of Laiza on the Chinese border.

Tens of thousands of people have been displaced in Kachin state since June 2011, when a 17-year ceasefire between the government and the Kachin Independence Army (KIA) broke down.

Many civilians are believed to have been killed in the ongoing conflict, although the exact number is unknown.

The KIA said a major strategic post had fallen to the Myanmar military on Saturday after it came under heavy artillery fire from multiple directions.

"That was the reason it collapsed. Finally we have to abandon that area, that mountain," James Lum Dau, the Thailand-based spokesman for the KIA's political wing, told AFP news agency.

Beijing this week urged an end to the fighting after vice foreign minister Fu Ying visited Myanmar for talks with President Thein Sein. China's foreign ministry spokesman Hong Lei said the pair had agreed to maintain peace and stability on their shared border.

Chinese state-run media has reported that China's Yunnan province is planning camps for 10,000 people in case large numbers flee across the frontier.

‘Mutual respect’

In its response to the US on Saturday, Myanmar blamed the rebels for reigniting the unrest.

The statement also railed against Washington's continued use of Burma, the country's former name.

"Myanmar strongly objects the usage of the words 'Burma', 'Burmese Government' and 'Burmese Military' in the US Embassy's press release", it said, urging the avoidance of actions that could affect "mutual respect" between the nations.

The Southeast Asian nation's official name was changed two decades ago by the former junta, which said the old term Burma was a legacy of British colonialism and implied that the ethnically torn land belonged only to the Burman majority.

Many opposition figures, including veteran activist Aung San Suu Kyi, continue to call the country Burma.

US President Barack Obama broke with tradition and used both names during his landmark visit to Myanmar in November, as he sought to encourage further reforms in the former pariah state.