* Latest violence between majority Buddhists and Muslims
* Crowd dispersed in early hours after police intervention (Adds background on previous police reaction to riots)
By Jared Ferrie and Aung Hla Tun
YANGON, July 2 (Reuters) - Myanmar police fired rubber bullets on Wednesday to disperse crowds of Buddhists and Muslims facing off in the second-largest city of Mandalay, police said, in the latest outbreak of trouble in two years of sectarian unrest.
Police deployed more than 600 officers after a crowd of about 300 Buddhists including 30 monks began throwing stones near a tea shop owned by a Muslim man at 11 p.m. (1630 GMT) on Tuesday, according to a statement released by Mandalay police.
"One policeman, three Buddhists and one Muslim were injured by stones in the incident," the statement said. "Two of the three injured Buddhist men are receiving treatment in Mandalay hospital and the rest got treatment as outpatients."
Police said they fired three rubber bullets in an attempt to control the crowd, which dispersed at around 3:15 a.m. on Wednesday after monks helped convince people to leave.
More than 200 people have been killed and at least 140,000 displaced in sectarian unrest since June 2012. Most of the victims have been from the minority Muslim population.
A witness who lives in the mostly Muslim neighbourhood said a Buddhist mob had gathered in Mandalay after rumours spread that the Muslim owner of a tea shop had raped a Buddhist woman.
Mandalay police confirmed in the statement that a charge of rape had been filed against the owner. They said they had put the shop under surveillance after receiving a tip that it would be targeted.
Myanmar's security forces were used by the former military junta to crack down violently on pro-democracy protesters. They have been criticised for failing to prevent bouts of anti-Muslim violence that have broken out since a reformist, semi-civilian government took power in 2011.
A Reuters investigation found that police officers stood by during four days of anti-Muslim riots in the central city of Meikhtila in April 2013, during which 43 people were killed and almost 13,000 displaced.
The New York-based advocacy group Human Rights Watch accused security forces of participating in attacks on Rohingya Muslims in western Rakhine State in 2012.
However, authorities were relatively quick to deploy security forces during riots in May 2013 in Lashio, near the northeastern border with China, where police and military evacuated Muslims to a Buddhist monastery after their homes and businesses were destroyed by marauding gangs of Buddhist men.
In villages near the town of Thandwe on the Rakhine coast in September 2013, police confronted Buddhist mobs that had torched Muslim homes, preventing further violence.
Mandalay Police Colonel Zaw Min Oo said Myanmar police had received crowd control training from the European Union and that officers had used "restraint and patience" when trouble broke out on Tuesday.
"Controlling riots among the people is not fighting with enemies in the battlefield. We bear this in mind," he told Reuters by telephone.
Police stood between the groups of Muslims and Buddhists and tried to drive the Buddhists away, the witness told Reuters.
"The police and the crowd fought each other and the crowd threw stones at the police," he said, asking not to be named out of concern for his safety.
He said the Buddhist mob ransacked shops and burned vehicles before police managed to restore order, but that at 6 a.m. Buddhists were still driving through the neighbourhood shouting at residents. (Additional reporting by Soe Zeya Tun; Editing by Alan Raybould and Jeremy Laurence)
Our Standards: The Thomson Reuters Trust Principles.