The Nobel Peace Prize laureate denied Muslims are subject to ethnic cleansing, although around 140,000 have fled the country to escape the violence.
"It's not ethnic cleansing," Suu Kyi said in a televised interview with the BBC.
"There are many moderate Muslims who have been well integrated into our society," she said. "These problems arose last year and I think that is due to fear on both sides. This is what the world needs to understand, both sides have been subjected violence."
The government has been struggling with clashes for the past year between ethnic Arakanese Buddhists and Rohingya Muslims in the state of Rakhine, next to the border with Bangladesh. Buddhists and Muslims have also clashed in central Myanmar.
The interviewer pressed her on whether she agreed that most of the violence has been directed against Muslims, with the result that 140,000 reportedly are displaced and living in camps.
"I think there are many, many Buddhists who have left the country for various reasons and there are many Buddhists in refugee camps ... in Thailand and scattered all over the world," she said. "This is a result of our sufferings and a dictatorial regime. If you live under a dictatorship for many years, you learn not to trust one and other."
Before all parties can sit down to ease ethnic tensions, Suu Kyi said fighting and violence needs to stop.
"We have said rule of law is imperative because before people can sit down and sort out their differences they have to feel safe," she said. "If they think they can be killed in their beds, they aren't going to talk about how to understand one and other."
She said she condemns hate of any kind and urged journalists to "ask the government what their policies are and what they are trying to do -- or not doing -- to improve the situation."
Around 735,000 Rohingya live in Rakhine state's northern area close to the Bangladeshi border, as estimated by the human rights organization Arakan Project, funded by the National Endowment for Democracy.
Rohingya are related to the Chittagonian Bengali across the border and are distinct from the majority Buddhist population of Myanmar, who are of Southeast Asian origin.
Bangladesh has received the majority of Rohingya fleeing by land and thousands remain in crowded refugee camps near the border. Many have fled by boat to other Asian countries, including Indonesia as well as Malaysia.
A report by the BBC in October 2012 said more than 1,000 homes had been burned since fighting broke in two towns in Rakhine and the government had instituted a nighttime curfew to maintain calm.
Also in October 2012, the Myanmar media website, operated out of Norway, Democratic Voice of Burma -- the former name for Myanmar -- said it had seen a document produced by the All-Arakanese Monks' Solidarity Conference.
In it, the Buddhist monks call for the creation of security groups led by monks to enforce discipline throughout the state and "to establish a magazine, covering all of Arakan state, to promote (Buddhist) religion."
The monks also called for Rohingya to be expelled from Myanmar, the DVB report said.
Suu Kyi, while welcoming the moves toward a more pluralistic democratic government in Myanmar, continues to be critical of the government's speed toward the goal.
She won a national election 20 years ago as head of the National League for Democracy party, but the ruling military government refused to hand over power. Instead, she was imprisoned several times for public statements condemning the lack of democracy and was ineligible to run in the 2010 national election because she was under house arrest.
The 2010 polling -- highly criticized by observer groups -- was won by ex-junta members who took office in early 2011. Since then, the government's moves toward a more open society have received cautious welcome from western governments and political activists, including Suu Kyi.
Suu Kyi eventually was elected as a member of parliament in a local -by-election.
She told the BBC the country is not democratizing at a fast rate, even though that may be the perception internationally.
"If anybody takes the trouble to read the constitution, they will be able to understand why we can't become a genuine democratic society with such a constitution in place."