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 While Washington says the country's overall direction is still positive, some experts worry Myanmar risks backsliding toward military rule that ended two years ago.
In the past two weeks, violence between Buddhists and Muslims has left dozens dead. Thousands of refugees of an earlier spate of sectarian bloodletting are fleeing on rickety boats. And in a key concern to U.S. policymakers, the country's murky military ties with North Korea continue.
Washington has been at the forefront of international efforts to encourage the country also known as Burma to open up to the world and ease controls on its 60 million people. Thursday marks the anniversary of the historic U.S. announcement that it was normalizing diplomatic relations
-- the first in a series of diplomatic rewards in response to reforms. That culminated in the suspension of economic sanctions and in November, the first visit to Myanmar by a U.S. president.
The benefits of reforms have been clear. President Thein Sein's government has released hundreds of political prisoners, eased restrictions on the press and freedom of assembly and brokered cease-fires with most of the nation's ethnic insurgencies. After years of house arrest, opposition leader Aung San Suu Kyi has been elected to parliament, which is performing its role with vigor.
But the rapid pace of change has also been accompanied by chaos, as ugly sectarian tensions have surfaced.
Human rights groups and a U.N. envoy have criticized the Myanmar government's failure to prevent attacks mostly on minority Muslims by majority Buddhists. Sectarian violence in western Rakhine state last year killed hundreds and drove more than 100,000 Rohingya Muslims from their homes, intensifying long-running persecution of the stateless minority group. In an ominous development, Muslim-Buddhist violence spread in March to central Myanmar, killing dozens more.
The government's emergency response has been slow and some fear the unrest could spiral.
"If the new government and opposition can't fashion an effective response to this violence that brings justice and accountability, then it seems likely the violence will escalate," said Frank Jannuzi, deputy executive director of Amnesty International USA.
"The risk here is that the military may step in and set back the reform process. That risk is very real."
A senior State Department official said the U.S. is gravely concerned about the violence and wants the government to make a broader effort to stem tensions before they flare up. But he credits President Thein Sein for eventually issuing a message of tolerance and respect for religious differences
-- unprecedented for the past 50 years when sectarian tensions were dealt with through use of force.
Although there's no national-level organization of unrest, individuals and groups appear to be inciting the violence, said the official, who spoke on condition of anonymity because of the sensitivity of the subject. He did not identify who they might be.
Priscilla Clapp, a former U.S. charge d'affaires in the former capital city of Yangon, visited Myanmar last month. She said the presence of outside provocateurs could be part of a campaign to strengthen the military's hand and keep it involved in maintaining order in the country.
The communal unrest has spawned a refugee crisis that is spilling beyond Myanmar's borders. Since the outbreak of violence in Rakhine state near Bangladesh last year, an estimated 13,000 Rohingyas have fled by sea, seeking refuge in Thailand, Malaysia, Indonesia and other countries. Hundreds have drowned, and in some cases authorities have pushed back refugees from their shores or refused them humanitarian access.
Despite the drumbeat of bad news, the Obama administration remains upbeat about Myanmar, contending that the pace of change has exceeded expectations and that overall progress toward democracy is positive.
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 Critics, however, question whether, in the rush to reward progress, the U.S. has lost its leverage should Myanmar backtrack.
Walter Lohman, director of the Asia program at the conservative Heritage Foundation think tank, said the administration was right to normalize diplomatic relations but moved too quickly to suspend investment and trade sanctions.
There are unresolved ethnic conflicts, a constitution skewed in favor of the military and political prisoners still in detention. National elections in 2015 are widely viewed as key to consolidating reforms.
"We won't really know whether the U.S. going so far and so fast on sanctions was the right thing to do for at least a year or so yet," said Lohman, who recommended the U.S. set benchmarks Myanmar should meet for sanctions to be lifted entirely. "The military could still call this whole thing off if they want to."
Questions linger about whether elements within the military are acting independently of Thein Sein. Despite his order to stop fighting, Myanmar's army pressed an offensive against ethnic Kachin rebels that has displaced an estimated 70,000 people in the north.
"The army clearly wants to remain a strong force and there are probably divisions between the uniformed army and the ex-generals who run the government," Clapp said.
The senior U.S. official said Myanmar has yet to sever its military relationship with North Korea, which Thein Sein has committed to do, and the U.S. is continuing to raise the issue with the government.
Since the start of the policy of engagement with Myanmar -- which reversed two decades of pressure and diplomatic isolation
-- a key U.S. goal has been to end North Korean weapon sales to Myanmar, which, if they are continuing, violate U.N. Security Council resolutions and could help pay for Pyongyang's nuclear and missile programs.
Yet the Obama administration appears to have decided that engaging the Myanmar military will be more productive than keeping it at arm's length. Myanmar was invited to observe U.S. military exercises in Thailand in February.
Aung Din, a U.S.-based activist and former political prisoner, views that as a seal of approval for an army still fighting its own citizens and committing atrocities. He said it would be better to get military chiefs in Indonesia and the Philippines
-- Southeast Asian nations that have shifted from authoritarian rule to democracy
-- to engage their Myanmar counterparts before the U.S. does.
He advocates more U.S. engagement with Myanmar's diverse ethnic minority groups, who have been fighting the military for decades and whose longstanding grievances need to be addressed for the country to achieve peace.
But Clapp, the former charge d'affaires, cautions there's only so much Washington can do to solve Myanmar's internal problems, including the Buddhist-Muslim unrest, beyond counseling what might be the best course of action.
"We can't get involved and stop it on the ground," she said. "It's their issue, it's their test."
[Associated
Press; By MATTHEW PENNINGTON]
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