Burma's president, Thein Sein, has admitted his country's Rohingya Muslim population has been subjected to an unprecedented wave of ethnic violence. Whole villages and large sections of towns have been destroyed.

Thein Sein's admission follows release of shocking satellite images showing the scale of the destruction in one coastal town, where most – if not all – of the Muslim population appears to have been displaced and their homes wrecked.

The pictures, acquired by Human Rights Watch, show destruction to the town of Kyaukpyu on the country's west coast. They reveal 14.4 hectares (35 acres) of destruction, in which some 811 buildings and houseboats have been destroyed.

The images confirm reports of massive violence in the town over 24 hours around 24 October, three days after the first wave of attacks. The incidents in Arakan province – also known as Rakhine – have displaced thousands of people in what appears to have been a wave of ethnic cleansing pitting Arakan Buddhists against Muslims. "There have been incidents of whole villages and parts of the towns being burned down," Thein Sein's spokesman said. A government official initially put the death toll at 112 but later revised it to 67.

Thein Sein's comments follow a warning from the office of UN general secretary Ban Ki-moon that ethnic violence was endangering political progress in Burma. The latest violence in Burma comes as the government is struggling to contain ethnic and religious tensions suppressed during nearly a half century of military rule that ended last year. Inter-ethnic violence broke out earlier this year, triggered by the rape and murder of a Buddhist woman by three Muslim men.

Human Rights Watch said it had identified 633 buildings and 178 houseboats and floating barges destroyed, in an area occupied predominantly by Rohingyas. A committee of MPs led by Nobel laureate Aung San Suu Kyi called on Friday for security reinforcements and swift legal action against those behind the killings and destruction.

According to Reuters, dozens of boats full of Rohingyas fled Kyaukpyu, an industrial zone important to China, and other recent areas of violence and were trying to reach overcrowded refugee camps around the state capital, Sittwe.

Some 3,000 Rohingyas were reported to have been blocked from reaching Sittwe by government forces and landed on a nearby island.

"Burma's government urgently needs to provide security for the Rohingya in Arakan, who are under vicious attack," said Phil Robertson, deputy Asia director at Human Rights Watch. "Unless the authorities also start addressing the root causes of the violence, it is only likely to get worse."

Human Rights Watch fears the death toll may be far higher than has been given so far. Its estimates are based on allegations from witnesses fleeing scenes of carnage and the government's history of underestimating figures.

Rohingyas are officially stateless. The government, controlled by Buddhists, regards the estimated 800,000 Rohingyas in the country as illegal immigrants from Bangladesh, and not as one of the country's 135 official ethnic groups, and denies them citizenship. But many of those expelled from Kyaukpyu are not Rohingya but Muslims from the officially recognised Kaman minority, said Chris Lewa, director of the Rohingya advocacy group, Arakan Project. "It's not just anti-Rohingya violence any more, it's anti-Muslim," Lewa said.