"Although it was a normal incident that can be handled in accordance with law, the situation turned violent due to the instigation of some organisations with aim of disturbing peace, stability and causing unrest," the New Light of Myanmar quoted the home ministry as saying Monday.
The communal violence was sparked by an argument over parking a three-wheeled motorbike in front of a shop in Thandwe on Sep 28, and left seven people dead and five others injured, reports Xinhua.
A total of 112 houses, three religious buildings and one petrol pump were gutted in arson, leaving 487 people homeless.
A day-long curfew was imposed in Thandwe on Oct 1 as the violence escalated.
Despite calmness in some parts, the curfew has not been lifted yet for security reasons, according to local authorities.