BANGKOK/YANGON -- Fighting between Myanmar's military and armed ethnic groups is intensifying near the border with India, disrupting a key infrastructure project and threatening to drive a rift between the two countries.

The Arakan Army, an armed ethnic group based in western Myanmar, took control of Paletwa township near the port city of Sittwe in mid-January. The area is a link in the Kaladan Multimodal Transit Transport Project, an Indian-led effort to connect Kolkata with eastern India via Myanmar.