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By Robert Birsel and Rahul Bhatia
YANGON/DHAKA (Reuters) - Myanmar's army unearthed the bodies of 17 Hindu villagers on Monday, taking to 45 the number authorities suspect were killed by Muslim insurgents last month at the onset of a wave of violence that has sent 436,000 refugees fleeing to Bangladesh.
The bodies have been found since Sunday buried outside a village in Rakhine State in western Myanmar, where bloodshed erupted on Aug. 25 when Rohingya Muslim insurgents launched coordinated attacks on about 30 police posts and an army camp.
The United Nations has described a sweeping military response to those attacks as "ethnic cleansing" aimed at driving Rohingya out of Buddhist-majority Myanmar.
Myanmar rejects that, saying it is fighting terrorists.
"There is no ethnic cleansing. There is no genocide," Myanmar's U.N. Ambassador Hau Do Suan told the U.N. General Assembly in New York on Monday. "The leaders of Myanmar who have long been striving for freedom and human rights would not espouse such policies."
"We will do everything to prevent ethnic cleansing and genocide," the diplomat said. "It is the responsibility of every government to fight against terrorism and protect innocent civilians. We condemn all human rights violations and violent acts."
Myanmar said before the mass graves were found that more than 400 people had been killed, most of them insurgents.
Members of Myanmar's small Hindu minority appear to have been caught in the middle.
Some have fled to Bangladesh, complaining of violence against them by soldiers or Buddhist vigilantes. Others have complained of being attacked by the insurgents on suspicion of being government spies.
A search was launched on the weekend after a refugee in Bangladesh contacted a Hindu community leader in Myanmar to say insurgents of the Arakan Rohingya Salvation Army (ARSA) marched about 100 people out of their village on Aug. 25 and killed them, the government said.
Twenty-eight bodies were found on Sunday.
"This afternoon, a suspicious place was found about 400 metres northeast of the mass grave where the remains of Hindus were found yesterday," the army said in a statement.
"Seventeen bodies of men were retrieved."
The government has not speculated as to why the Hindus were killed. The army said the security forces and Hindu community leaders would continue the search.
Access to the area by journalists as well as human rights workers and aid workers is largely restricted.
An ARSA spokesman denied his group had killed the Hindus, saying Buddhist nationalists were trying to divide Hindus and Muslims.
"ARSA has internationally pledged not to target civilians and that remains unchanged, no matter what," the spokesman, who is based in a neighbouring country and identified himself only as Abdullah, told Reuters through a messaging service.
'SHOT, HACKED, BRUTALIZED'
The violence in Rakhine State and the refugee exodus is the biggest crisis the government of Nobel laureate Aung San Suu Kyi has faced since it came to power last year in a transition from nearly 50 years of military rule.
Myanmar regards the Rohingya Muslims as illegal immigrants from Bangladesh and communal violence has flared periodically for decades. Most Rohingya are stateless.
In Bangladesh, the head of the U.N. refugee agency said the Rohingya seeking shelter from "unimaginable horrors" faced enormous hardship and risked a dramatic deterioration in circumstances unless aid was stepped up.
"They (have) seen villages burned down, families shot or hacked to death, women and girls brutalized," U.N. High Commissioner for Refugees Filippo Grandi told a news conference in Dhaka after visiting camps near the border on the weekend.
"Solutions to this crisis lie with Myanmar", he said, though for now, the world had to help and aid should be "rapidly stepped up".
A Reuters reporter in Bangladesh said refugees were still arriving, with about 50 seen on Monday.
The crisis has also threatened to drive a wedge into the Association of South East Asian Nations, with Muslim-majority Malaysia disavowing a statement on the Myanmar situation from the bloc's chairman, the Philippines, on the grounds it misrepresented "the reality" and did not identify the Rohingya as one of the affected communities.
Myanmar, which is a member of the regional grouping, objects to the term Rohingya, saying the Muslims of Rakhine State are not a distinct ethnic group.
This month, Malaysia summoned Myanmar's ambassador to express its grave concern over "atrocities" there.
For a graphic on the Rohingya refugee crisis, click: http://fingfx.thomsonreuters.com/gfx/rngs/MYANMAR-ROHINGYA/010050XD232/index.html
(Additional reporting by Wa Lone, Shoon Naing in YANGON, Andrew Marshall in BANGKOK, Joseph Sipalan in KUALA LUMPUR, Tommy Wilkes in COX'S BAZAR and Michelle Nichols at the UNITED NATIONS; Writing by Robert Birsel; Editing by Mark Heinrich and James Dalgleish)