Rohingya Muslim insurgents who have fled Myanmar to seek refuge in Bangladeshi camps may stage cross-border attacks, targeting security facilities and non-Muslims in Myanmar, the International Crisis Group (ICG) has warned in a new report.

But the non-governmental organisation cautioned countries against imposing further sanctions on Myanmar, saying these are "unlikely to produce positive change".

The report, titled Myanmar's Rohingya Crisis Enters a Dangerous New Phase, published yesterday, said the home-grown Arakan Rohingya Salvation Army (Arsa) militant group "appears determined to regroup and remains relevant" following its attacks on police posts and an army base in Rakhine state in August, which led to a security crackdown.

While it has not launched any new attack since then, it "will undoubtedly strive to do so", the report said.

Led by a network of respected local leaders, including young mullahs or religious leaders, Arsa has organised cells in hundreds of villages. It has attempted to start uprisings by sending large numbers of ordinary villagers, armed with farm tools, to overrun police posts - a departure from its previous approach of stationing uniformed, armed militants in camps, the ICG added.

"Yet operating under cover of the civilian population is no longer possible given that few Rohingya villages remain. Most of the group's organisers and fighters are now in the Bangladesh camps," it said.

"The group may thus shift to cross-border attacks, which would require different training, access to weapons as well as operating space in Bangladesh," the ICG said, adding that it could aim at "opportunistic security targets in northern Rakhine or turn to attacking any non-Muslim villagers resettled on Rohingya lands, an easier target".

The ICG warned that such attacks could escalate tensions between Bangladesh and Myanmar, potentially leading to clashes between the militaries of the two countries. They would also reinforce anti-Rohingya sentiment within Myanmar and prompt stronger security measures, hindering the chances of the refugees' return.

Attacks on Rakhine Buddhists would also inflame anti-Muslim sentiment and tip central Rakhine state - so far untouched by the recent violence - into crisis, the report added.

Dr Subir Bhaumik, a consulting editor with Mizzima Media in Myanmar, told The Straits Times that the number of organised cells led by respected religious leaders is not large - only up to 30 squads in northern Rakhine. Arsa is seeking to eliminate Rohingya moderates, he said.

He echoed the ICG's view that Arsa will shift to cross-border insurgency and draw upon Rohingya recruits in Bangladesh refugee camps. The group will also target non-Rohingyas, especially ethnic Rakhines, settled on Rohingya lands.

"But the present government of Bangladesh is determined to not encourage Arsa because it has close links to (Bangladesh) terror groups like JMB," or the Jama'at ul Mujahideen Bangladesh, he said.

The ICG also warned against imposing international sanctions on Myanmar over the Rohingya refugee crisis. It said policymakers should be "under no illusions" that those sanctions would bring positive change, and they could in fact worsen the situation.

"Their most likely effect will thus be to push the government, military and population even closer together and to reinforce current narratives in Myanmar that the West is a fickle friend and unreliable partner," the report said.

Dr Oh Su-Ann, a visiting fellow at the ISEAS - Yusof Ishak Institute, told The Straits Times that outsiders seeking to ease the situation could help by trying to broker peace and reconciliation or by donating money to help deal with the humanitarian crisis.

She said: "It would help if the international community were to provide assistance to both governments of Bangladesh and Myanmar while reducing their overt criticisms, as these would only succeed in increasing the us-versus-them attitude in Myanmar."