Bamboo and sheet-metal shelters lie ruined in the hills of northern Myanmar after a deadly strike on a camp housing displaced people that a local rebel group says was carried out by the military.

Twenty-nine people were killed and dozens wounded in a strike late Monday night on the camp in Kachin state near the border with China, sparking a desperate rush to pull bodies from the debris by torchlight.

The camp is one of many in Myanmar's northern hills, home to the world's largest jade mines and a decades-long conflict between the military and ethnic Kachin rebels that has escalated since the junta seized power in a 2021 coup.

The explosion was felt in the town of Laiza, around two kilometres (1.2 miles) away, an activist based there told AFP.

"Even my house was shaking when the bomb hit the camp," she said, asking not to use her name due to security concerns.

Mong Lai Hkyet camp -- home to around 600 people -- was largely deserted on Wednesday, with soldiers from the Kachin Independence Army (KIA), which controls the area, restricting access to the scene.

Structures of wood, corrugated metal and bamboo lay crumpled and twisted, and a wooden sign pointing the way to a local school lay lopsided in the earth.

Residents working in small groups picked through the debris to salvage belongings.

The blast shattered windows in the hospital at Laiza, where some of the 56 wounded in the attack were treated, the activist said.

The dead were buried on Tuesday afternoon; a crowd sang Christian hymns as wooden coffins were lowered into the ground.

Some family members wept and laid wreaths of flowers before an excavator pushed earth over the resting places.

The KIA controls swathes of Christian-majority Kachin state and has clashed with the military for decades.

The region has seen heavy fighting in the wake of the coup, with the military accusing the KIA of arming and training the newer People's Defence Forces that have sprung up to battle the junta.

- 'Need to resettle' -

A KIA investigation had determined the military had used a drone carrying "a huge bomb" in the attack, KIA spokesman Colonel Naw Bu told AFP.

The military has denied it was involved.

On Wednesday it said the blast was a result of an explosion at a KIA warehouse containing around 105 tonnes of ammonium nitrate and weapons.

The military added that it was still investigating what had set off the blast.

Laiza, nestled against the Chinese border, is the headquarters of the KIA, where it has trained and equipped other ethnic rebel groups battling the military in their homelands.

Military air strikes on a concert held by the KIA's political wing in October last year killed around 50 people and wounded 70.

The junta said reports that the air strike killed civilians were "rumours".

"Our people have lost their lives, their properties and their lives have been threatened," said the activist from Laiza.

"We urgently need to resettle people and find new livelihoods for the wounded, and it will be very hard to do this."

AFP