Win Naing, a local delegate from the opposition National League for Democracy, told Thai newspaper The Irrawaddy one Muslim woman was killed during clashes that resulted in the destruction of village homes.
"I heard that 35 houses were burned down," he said.
The Thai newspaper said clashes began last weekend but escalated Tuesday morning local time. Local officials in the state said at least 800 people were involved in attacks on Muslim villages in the area.
The Irrawaddy reports clashes erupted after a Muslim man became involved in an argument with a Buddhist taxi driver.
The U.N. High Commissioner for Refugees sounded the alarm most recently in August when communal violence in the region left one person dead and 10 others injured. Nearly 140,000 people have been displaced by violence in Rakhine since last year.
Myanmar was praised for political reforms that started with general elections three years ago. National security issues and human rights concerns have overshadowed some of the reforms.
The violence comes as Myanmar President Thein Sein makes his first official visit to the coastal state of Rakhine since taking office in 2010.
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