Fighting has rocked the town of Lashio, home to the military's northeastern command, since July 3 when an alliance of ethnic armed groups renewed an offensive against junta troops.
Local media run by the Myanmar National Democratic Alliance Army (MNDAA) reported the group "fully captured the headquarters of the Northeast Military command in Lashio" on Thursday morning and also captured Lashio town, home to around 150,000 people.
MNDAA spokesman Li Jiawen said the group's fighters had captured Lashio, without giving further details.
But junta spokesman Zaw Min Tun told reporters the claim was "not true".
"The insurgents infiltrated the outskirts of Lashio so (the security forces) have been following and clearing them," he said, without giving details.
The northeastern command is located in the north of Lashio.
A video uploaded to social media with a caption saying it was shot in Lashio on Thursday morning showed deserted streets with no soldiers in sight.
AFP reporters geolocated the video to a site in the town around two kilometres (1.2 miles) from the command.
Northern Shan state has been rocked by fighting since late last month when an alliance of ethnic armed groups renewed an offensive against the military along the highway to China's Yunnan province.
The clashes have shredded a Beijing-brokered truce that in January halted a campaign by the alliance of the Arakan Army (AA), the Ta'ang National Liberation Army (TNLA) and the MNDAA.
The military has carried out several air strikes around the town during the fighting, according to residents.
Dozens of civilians have been killed or wounded in the recent fighting, according to the junta and local rescue groups.
Neither the junta nor the ethnic alliance have released figures on their own casualties.
Indonesia's foreign minister on Thursday slammed the junta's unwillingness to engage with a regional peace plan to resolve the conflict, speaking after meeting her Singaporean counterpart on the sidelines of an Association of Southeast Asian Nations foreign ministers meeting in Laos.
Both Singapore and Indonesia have been critical of the junta's power grab, which has divided the 10-member ASEAN bloc.
- China 'close attention' -
Myanmar's borderlands are home to myriad ethnic armed groups who have battled the military since independence from Britain in 1948 for autonomy and control of lucrative resources.
Some have given shelter and training to newer "People's Defence Forces" (PDFs) that have sprung up to battle the military after the coup in 2021.
China is a major ally and arms supplier to the junta, but analysts say it also maintains ties with armed ethnic groups in Myanmar that hold territory near its border.
Beijing was "paying close attention to the situation in northern Myanmar" and urged a halt to the fighting, foreign ministry spokeswoman Mao Ning told a press conference on Thursday.
It had also urged relevant parties "to not endanger the safety of China's borders and border residents, as well as Chinese projects, firms, and personnel in Myanmar", she said.
Three people had been killed and 10 wounded in military air strikes on the MNDAA-held city of Laukkai on the border with China this week, MNDAA's Li Jiawen said, adding that the wounded included three Chinese nationals.
The armed group captured Laukkai in January after around 2,000 junta troops surrendered, in one of the military's biggest single defeats in decades.
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