Yangon, Myanmar (CNN) -- A dispute between a Muslim gold shop owner and two Buddhist sellers erupted in clashes that left 10 people dead, 20 injured and four mosques burned to the ground in central Myanmar, local officials said Thursday.
The clashes began Wednesday morning in Meiktila Township after a quarrel between the shop owner and the sellers, police said.
The sellers were beaten up by four other Muslim shop owners, police said.
In retaliation, Muslims and Buddhists took to the street, torching houses and schools, said Police Lt. Col. Aung Min.
To defuse tensions, police imposed a curfew Wednesday night.
Tension, police presence
The death toll from the violence has risen to 10, said Win Htein, a member of parliament for the area. He described the situation as still tense despite the increased police presence.
Win Htein, a member of opposition leader Aung San Suu Kyi's National League of Democracy, linked the unrest to feelings stirred up by clashes between Buddhists and Muslims in western Myanmar last year.
When police took two Muslim shop owners to court Thursday, a group of several hundred Buddhists tried to attack them and threw rocks, he said.
Myanmar is emerging from decades of military repression to democracy, but has been plagued by bouts of ethnic violence.
In the western state of Rakhine, tensions between the majority Buddhist community and the Rohingya -- a stateless ethnic Muslim group -- boiled over into clashes that killed scores of people and left tens of thousands of others living in makeshift camps last year.
Most of the victims were Rohingya.
"The ongoing intercommunal strife in Rakhine State is of grave concern," the International Crisis Group said in a November report. "And there is the potential for similar violence elsewhere, as nationalism and ethno-nationalism rise and old prejudices resurface."
A failure by authorities to address deepening divisions between the communities could result in a resumption of violence in the future, the report said, "which would be to the detriment of both communities, and of the country as a whole."
The U.S. ambassador to Myanmar, Derek Mitchell, said he was "deeply concerned" about the reports of violence in Meiktila this week.
U.S. diplomats are monitoring events closely, he said in a post on the embassy's Facebook page.
Win Htein, the local lawmaker, said that about 30% of the township's 100,000 residents are Muslim.
CNN's Jethro Mullen in Hong Kong contributed to this report.