SYDNEY • Malaysian Prime Minister Najib Razak has warned his South-east Asian neighbours that the Rohingya refugee crisis in Myanmar could become a serious security threat for the region.

About 700,000 Rohingya Muslims have fled Myanmar's troubled Rakhine state after the authorities launched a brutal crackdown on insurgents six months ago, which the United Nations has called "ethnic cleansing".

Myanmar has vehemently denied the allegations, insisting it was responding to attacks by Rohingya militants in late August.

Datuk Seri Najib yesterday raised fears that so many desperate and displaced people could fall prey to extremist groups like the Islamic State in Iraq and Syria (ISIS).

With Myanmar's de facto leader Aung San Suu Kyi sitting just metres away at a special Asean-Australia summit in Sydney, Mr Najib said it was no longer a domestic issue.

"Because of the suffering of Rohingya people and that of displacement around the region, the situation in Rakhine state and Myanmar can no longer be considered to be a purely domestic matter," he said.

"In addition, the problem should not be looked at through the humanitarian prism only because it has the potential of developing into a serious security threat to the region.

"Rakhine with thousands of despairing... people who see no hope in the future will be a fertile ground for radicalisation and recruitment by (ISIS) and affiliated groups."

The UN last Friday launched an appeal for nearly US$1 billion (S$1.3 billion) to care for Rohingya refugees, who have mostly fled to Bangladesh.

Mr Najib said Malaysia was ready to assist in finding "a just and durable solution".

"We must be vigilant and increase our collaboration, because the collapse of (ISIS) territories in Iraq and Syria has forced it to go underground and re-emerge elsewhere, especially in crisis zones where it can grow and operate."

He pointed to pro-ISIS militants seizing the southern Philippine city of Marawi last year as a warning of what can happen.

"We must draw lessons from Marawi and be extremely concerned that at least 10 militant groups in the Mindanao region (of the Philippines) have declared their affiliation to (ISIS)," he said.

AGENCE FRANCE-PRESSE