WASHINGTON •In a region that has seen many a miserable exodus, the Naf river separating Bangladesh and a northern section of Myanmar's Rakhine state has become the scene of yet another.

A bedraggled stream of some 90,000 Rohingya Muslims have fled the northern part of Rakhine state into Bangladesh since Aug 25 - stumbling through open rice fields, fleeing attacks by an army not known for its empathy with ethnic minorities and bent on finishing what its commander-in-chief Min Aung Hlaing calls the "Bengali problem".

With the tinderbox now ignited, there are real fears that Rakhine, after decades of poverty and discrimination against the minority Muslim Rohingya that took a turn for the worse in 2012, is sliding into a potential abyss of grinding ethnic war with far-reaching consequences.

"This seems to be going in the direction of a worst-case scenario - an armed struggle turning into a longer regional conflict," a senior Asian diplomat familiar with the region told me.

The tough response from Myanmar's army, the Tatmadaw, is backed by strident Burmese-Buddhist nationalism feeding off a social media frenzy of often unverified stories of atrocities by the Arakan Rohingya Salvation Army (Arsa) - designated a "terrorist" group by Myanmar's government.

The Rohingya have been in Rakhine state for generations, but have long been seen as Bengali immigrants from Bangladesh who want to grab land and Islamise Buddhist Rakhine state. They have been denied citizenship if they identify themselves as Rohingya. Myanmar insists "Rohingya" is an invented ethnic identity. Hence the "Bengali problem" which army chief Min Aung Hlaing last Friday said was a "longstanding one which has become an unfinished job".

There has been little or no serious attempt by successive governments in Naypyitaw to work on a political compromise. Meanwhile, around 300,000 Rohingya from previous waves of refugees live in squalid, festering camps in Bangladesh.

The weight of the majority in mostly Buddhist Myanmar is against the Muslim Rohingya. The popular call is for the army to do more - and do it decisively.

These developments were long predicted. For years, South Asian security analysts worried that Myanmar's sustained discrimination against the Rohingya would produce a backlash. The Rohingya tried and failed at militancy before through the vehicle of the Rohingya Solidarity Organisation (RSO). But now the new Harakah al-Yaqin (Faith Movement), which has switched to the English name Arakan Rohingya Salvation Army , has seized the initiative.

Arsa militants' first big attack against Myanmar security units came last October. The violence was "qualitatively different from anything in recent decades, seriously threatens the prospects of stability and development in the state, and has serious implications for Myanmar as a whole", the International Crisis Group (ICG) warned then.

Some 3,000 Buddhist Rakhine villagers fled to towns. Further south, the state capital Sittwe remains stable. But the Myanmar security forces' reprisals were swift, driving many Rohingya across the border into Bangladesh, which officially complained about the influx.

On the morning of Aug 25 came a bigger attack with Arsa militants killing 10 policemen, one soldier and an immigration officer. Regional security sources told The Straits Times about 200 militants, including a smattering of foreigners, may have crossed over from Bangladesh for the attack.

"There are several credible reports of Indonesian fighters especially from Aceh, and Filipinos, fighting with Arsa but the majority of the outsiders are Pakistanis - that is established beyond doubt," said a regional security source.

Details are murky, but this time some Hindus - a small minority in Rakhine state - also claimed to have been attacked either by Arsa militants or Buddhist Arakanese. "This is a new element, a larger dimension of Islam versus the others," warned the diplomat who spoke to The Straits Times.

There were mass evacuations of Buddhist and Hindu civilians, and this time even wider reprisals from Myanmar's security forces against the Rohingya.

Certainly the conflict has long roots, and the Rohingya identity remains contested. However, arguing over a name has become moot. There are bigger things to worry about now.

The Tatmadaw's harsh reprisals will drive more resentful young men into the ranks of the Arsa, which sources say is fuelled by money channelled mostly from Saudi Arabia through Malaysia, Thailand and Bangladesh, and has become the new militant vehicle of choice for angry Rohingya.

"In the squalid refugee camps in Bangladesh, joining the Arsa is now becoming 'farj' - a religious obligation," Professor Zachary Abuza at the National War College in Washington, DC wrote last week, in a commentary for Radio Free Asia.

Arsa's chief on the ground is Ata Ullah or Hafiz Atharullah, Pakistan-born and raised in Saudi Arabia. According to sources, Ata Ullah has also spent time in Mae Sot in Thailand. The militants are thought to have trained in Bangladesh under Afghan war veterans, some of them Rohingya. The Arsa has also been killing Rohingya they suspect of being government informers. It may also have eliminated members of the RSO who did not agree with armed struggle.

Importantly, Ata Ullah has disavowed international terrorist linkages. But intelligence circles worry about what relationship there may be, now or in the future, between the Arsa and Bangladeshi extremist organisations like the Harkat-ul-Jihad-al-Islami, Hifazat-e-Islam Bangladesh and Ansarullah Bangla Team, some of which dream of a greater Islamic Bangladesh, including parts of north-eastern India and Rakhine state.

"Now that (Arsa) has established its legitimacy and capability with attacks, it is unlikely to face funding constraints," the ICG presciently said in December last year. "It seems to be receiving funds from the Rohingya diaspora and major private donors in Saudi Arabia and the Middle East. It may also attract the attention of international groups interested in more than funding."

The Tatmadaw's "clearance" of Rohingya villages - a euphemism for destroying them, as evinced by satellite images and the refugees stumbling into Bangladesh - will play into the hands of radical Islamic groups, analysts say.

"It will encourage fundamentalist forces in Bangladesh," the diplomat said. Bangladesh's government was worried, he said - but could do little because Dhaka does not want a conflict with Myanmar.

"The Myanmar military's default mode is to commit these pogroms," Prof Abuza said. "This is an insurgency that has been created by the Myanmar military."

"My worry," said the security analyst who spoke to The Straits Times on condition of anonymity, "is that this vortex of blood will ebb and flow now, in the region, for at least another 10 years."