Myanmar's deputy defence chief on Monday urged the world to give his government "time and space" to solve a crisis involving the Rohingya Muslim minority amid concerns jihadists could exploit the situation.

Rear Admiral Myint Nwe told a security forum in Singapore his government is "fully aware of the growing concern about the widespread reports on (the) situation in Rakhine state" where the Rohingya live, and was committed to address the issue and punish wrongdoers.

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Since October Myanmar's army has carried out "clearance operations" in the north of the western state to root out insurgents accused of deadly raids on police border posts.

At least 66,000 Rohingya have fled to neighbouring Bangladesh, alleging rape, murder and torture at the hands of security forces.

Myanmar has long faced international criticism over its treatment of the Rohingya. Most people in the majority Buddhist community consider them illegal immigrants from Bangladesh.

"The government does not condone rights abuses against innocent civilians. Legal action will be taken in response to any substantiated claim," Myint Nwe said.

The admiral was responding to a keynote address by Malaysian Defence Minister Hishammuddin Hussein at th Fullerton Forum organised by the International Institute for Strategic Studies.

Hishammuddin warned that the situation in Rakhine — if not addressed properly — could be exploited by the Islamic State group as it seeks a base in Southeast Asia.

"This horrific possibility has the potential to cause death and destruction well beyond the borders of ASEAN," he added, referring to the Association of Southeast Asian Nations.

Answering a delegate's question, Hishammuddin said the Rohingya issue "is going to test ASEAN solidarity… It needs to be resolved, we cannot sweep it under the carpet, it affects a lot of Muslims and it's very emotional".

Myint Nwe said both Yangon and the international community should focus on finding a "lasting solution" to the problem.

"Allowing time and space is essential for the government's efforts to bear fruit in finding a sustainable solution of this complex issue." 

Hishammuddin said ASEAN — the regional bloc to which both Malaysia and Myanmar belong — should play a key role in working out a solution with Myanmar's leaders.