One person was killed and 10 others were wounded in the incident, Win Myaing, a government spokesman, said today.
The Buddhist-majority nation, which only recently emerged from a half-century of isolation and military rule, has been grappling with religious violence for more than a year.
More than 250 people have been killed, most of them minority Muslims, and another 140,000 have been forced to flee their homes. Many still live in crowded refugee camps, with limited access to food, clean water or medical care.
UN rapporteur Tomas Ojea Quintana is on an 11-day visit, including a stop in Rakhine, scene of some of the worst bloodshed.
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Tensions in the state's main city of Sittwe were high after the battered body of a fisherman washed ashore Friday, sparking rumors among Rohingya Muslims that he had been killed by police.
Win Myaing said police fired into the air after 500 Rohingyas demanding access to the body attacked a police checkpoint. After crowds swelled to nearly 1,000 and violence started to spread, the officers shot into the crowd, wounding at least 10, Win Myaing said.
There were no immediate comments from Quintana.