(Recasts with police guarding Muslim neighbourhood.)
By Paul Mooney
MANDALAY, Myanmar, July 4 (Reuters) - Myanmar police cordoned off Mandalay's Muslim neighbourhood as hundreds of Buddhists wielding knives, swords and bamboo poles roamed the city on Friday, following communal riots that killed two people earlier in the week.
Inter-religious violence has flared throughout the country over the past two years, threatening to undermine political reforms initiated by the quasi-civilian government of President Thein Sein, which took office in 2011 following 49 years of repressive military rule.
At least 240 people have been killed and more than 140,000 displaced since June 2012. Most of the victims have been members of Myanmar's Muslim minority, estimated to be about 5 percent of the population.
Around 300 Buddhists rode motorcycles around Myanmar's second largest city of Mandalay on Friday, shouting death threats.
"We're going to kill all the Muslims," some shouted as they rode through the streets after attending the funeral of a Buddhist man stabbed to death on Wednesday night.
A Muslim man was also killed, beaten to death early on Thursday on his way to morning prayers.
Police erected barriers lined with barbed wire to block roads into a predominantly Muslim neighbourhood and prevented the Buddhists on motorcycles from entering. Officers in riot gear patrolled the streets, and one spoke through a megaphone, telling people to go inside.
While police guarded the neighbourhood, they did not disarm the Buddhists who had been riding around the city since midday, screaming threats and singing the national anthem. A man was seen distributing bamboo poles from a car parked near the royal palace, a popular tourist attraction in the city of about a million people.
Many Muslims fled the neighbourhood after violence broke out Tuesday, going to hotels or nearby towns.
Police said 19 people were hurt in riots on Tuesday and Wednesday nights. A 9 p.m. to 5 a.m. curfew backed up by a heavy police presence prevented further trouble on Thursday night and the same curfew will be in force on Friday.
The violence began late on Tuesday when a group of about 300 Buddhists converged on a tea shop owned by a Muslim man accused of raping a Buddhist woman.
A police officer in the capital, Naypyitaw, told Reuters on Thursday that charges of rape had been filed against the tea shop owner and his brother.
An imam at Mandalay's largest mosque told Reuters that five Muslims had been arrested on Friday after police searched homes nearby and found ceremonial knives.
"Police definitely know these are used for ceremonial purposes," said Ossaman, the imam. "They were not breaking any law."
A police officer confirmed the arrests but refused to provide further details and asked that his name be withheld as he was not authorised to speak to the media.
Anti-Muslim violence is not new in Myanmar. The former junta imposed a curfew in Mandalay after riots in the city in 1997 following reports that a Muslim man had raped a Buddhist girl.
But outbreaks of violence have become more common under the reformist government, which lifted restrictions on freedom of speech, including access to the Internet, which had previously been tightly controlled by the military. (Writing by Jared Ferrie; Editing by Alan Raybould and Jeremy Laurence)