(Adds curfew, funerals of the Muslim and Buddhist victims)
By Paul Mooney
MANDALAY, Myanmar, July 3 (Reuters) - Two men were killed in a second night of rioting in Mandalay, Myanmar's second largest city, a security official said on Thursday, the latest flare-up in two years of sectarian unrest that threatens fledgling reforms.
A Buddhist and a Muslim were killed and 14 people hurt, Aung Kyaw Oo, an army colonel in charge of security in the Mandalay region, told reporters.
Police on Thursday imposed a curfew in the city from 9 p.m. to 5 a.m. The clampdown followed two nights of violence starting on Tuesday when about 300 Buddhists converged on a tea shop owned by a Muslim man accused of raping a Buddhist woman.
Police stood between the Buddhists and a crowd of Muslims who gathered nearby and fired rubber bullets in an attempt to restore order. The crowd dispersed at about 3 a.m. on Wednesday, but witnesses said they saw groups of Buddhist men with sticks on the streets that evening.
There has been no direct response from the central government to the unrest, although in a speech printed in state-run daily New Light of Myanmar, President Thein Sein called Myanmar a "multi-racial and religious nation" and warned against sectarian violence.
"For the reform to be successful, I would like to urge all to avoid instigation and behaviour that incite hatred among our fellow citizens," he said in the speech, also broadcast on radio.
Aung Kyaw Oo said police had arrested four people on Wednesday after the first night of rioting.
A senior police officer in the capital, Naypyitaw, told Reuters that charges of rape had been filed against the tea shop owner and his brother at a police station in Pyinmana, a town halfway between Mandalay and Naypyitaw where the rape allegedly took place.
Thein Sein's government launched sweeping political and economic reforms after he took office in 2011 following 49 years of repressive military rule.
However, it has struggled to contain outbreaks of anti-Muslim violence in which at least 240 people have been killed since June 2012. Most victims were members of Myanmar's Muslim minority, estimated to be about 5 percent of the population.
The body of the Muslim who died lay shrouded in cloth at a mosque in the centre of Mandalay, where community members gathered. One man unwrapped the cloth to show scars and stitches on the head and upper body.
His wife sat next to the body, rocking back and forth and weeping. She said she pleaded with her husband not to leave the house, but he rode his bike to prayers and was attacked on the way at around 4 a.m.
"His body lay there on the street for two hours before anyone took care of him," she said, asking that her name be withheld.
A similar scene unfolded under a canopy near a monastery on the outskirts of Mandalay where friends and family gathered for the funeral of the Buddhist victim. Thick stitches on his chin and forehead marked where he had been slashed and stabbed.
Family members drove from the site in tears, refusing to speak. A man who declined to give his name said the victim was not involved in the riots but had gone out to collect money owed to him when he was attacked at around midnight. "They just wanted to attack him. There was no reason."
MUSLIMS STAY INDOORS
Mandalay, a city of about one million in the centre of the country, remained tense on Thursday. Reuters reporters saw a heavy police presence and some streets were blocked by metal and wooden barriers strung with barbed wire.
Shops in the Muslim neighbourhood were closed and one resident said Muslims were staying inside, afraid their homes and businesses could be attacked.
"Most Muslims are hiding and some shifted to other towns near Mandalay and to hotels," he said, asking not to be named out of fear for his safety.
Long considered the centre of Burmese culture and Buddhist learning, Mandalay is home to a radical monk called Wirathu, known for his anti-Islamic sermons and call to boycott Muslim-owned shops. The city also has dozens of mosques and a sizeable Muslim population.
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. (Additional reporting by Jared Ferrie and Aung Hla Tun in Yangon; Editing by Alan Raybould and Nick Macfie)