By Karen Smith and Marilia Brocchetto, CNN

(CNN) -- Myanmar's government has rejected a proposed ceasefire by militants in the country's embattled Rakhine state, saying they don't "negotiate with terrorists."

Rohingya militants, known as Arakan Rohingya Salvation Army, or ARSA, issued a statement Saturday, saying "offensive military operations" would be paused until October 9 to give access to aid groups.

The statement called on the Myanmar government to do the same to address the "humanitarian crisis" unfolding in the state.

However in response to a request for comment on the ceasefire, Zaw Htay, the spokesman for the office of State Counselor Aung San Suu Kyi, told CNN they would not be accepting the offer.

"We have no policy to negotiate with terrorists," Zaw Htay told CNN.

At least 294,000 Muslim Rohingyas have fled across the border to Bangladesh since fighting broke out on August 25, according to a situation report from the Inter Sector Coordination Group (ISCG) in Bangladesh. The report said $77 million in funding was needed to deliver urgent aid to the new arrivals.

Yanghee Lee, the United Nations Special Rapporteur on Human Rights for Myanmar, said Friday that at least 1,000 people had been killed in the violence, though she said that figure is "very likely an underestimate."

"Figures are difficult to verify because of lack of access to the affected areas," she said.

The Myanmar government said 421 people had died.

Rohingya Muslims are considered to be among the world's most persecuted people.

The predominantly Buddhist Myanmar considers them Bangladeshi but Bangladesh says they're Burmese. As a result, they're effectively stateless.

On August 25, Rohingya militants killed 12 security officers in co-ordinated attacks on border posts, according to Myanmar's state media.

In response, the military intensified "clearance operations" against "terrorists," driving thousands of people from their homes.

Satellite photos released by Human Rights Watch show entire villages torched to the ground in clashes between Myanmar's armed forces and local militants.

Cessation of military operations

The US Department of State said Saturday it is "very concerned" about the violence unfolding in the region, but stopped short of criticizing the country's government or Nobel laureate Aung San Suu Kyi.

The State Department is working with international partners, including the Office of the United Nations' refugee agency, the International Committee of the Red Cross and the International Organization for Migration, to provide emergency assistance for the displaced, the statement said.

As the humanitarian crisis escalated, Archbishop Emeritus Desmond Tutu wrote to his fellow Nobel laureate Suu Kyi, begging her to stop the violence.

"I am ... breaking my vow of silence on public affairs out of profound sadness about the plight of the Muslim minority in your country, the Rohingya," he wrote in an open letter, posted on his official Twitter Thursday.

Suu Kyi has repeatedly come under criticism for her lack of action to help the Rohingya, a stark contrast to her previous image as a champion of human rights.

She has repeatedly denied accusations of human rights abuses against the Rohingya, and in April denied to the BBC that ethnic cleansing was taking place.

Some observers point out that the Rohingya issue is so heated in Myanmar that Suu Kyi would lose her popularity, and eventually possibly her position, if she backed the ethnic minority.

Who are the Rohingya?

The Rohingya are a Muslim ethnic-minority group that has lived as a people in Myanmar for centuries.

They have been raped, tortured and killed. They have been crowded on boats, ping-ponged between nations that don't want them. They have been forced into labor and have no rights to their land.

Today, more than a million of them live in the country, most in the western coastal state of Rakhine, where they make up around a third of the population. They speak their own language, which isn't recognized by the state.

There are regular clashes between the Rohingya and the country's security forces, as well as other ethnic groups in Rakhine, which are predominantly Buddhist. Rohingya militant groups are often involved in the clashes.