It comes as two reporters for Reuters news agency face trial for receiving secret documents reportedly related to the massacre.
Following the discovery of a mass grave in Inn Dinn village, the military launched an investigation into the incident last month.
"It was found that there were no conditions to transfer the 10 Bengali terrorists to the police station and so it was made a decision to kill them". The use of the term "Bengali" is the commonly used term for Rohingya in Burma as it implies they are illegal immigrants from Bangladesh, despite them living in Burma for generations. Government forces began a sweeping crackdown against the minority group following a Rohingya militant attack on August 25.
The military said legal action would be taken against members of the security forces who violated their rules of engagement in killing the 10 suspected insurgents, and against ethnic Rakhine Buddhist villagers who were also involved.
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"Villagers and members of the security forces have confessed that they committed murder", the military said in a statement on Wednesday. Myanmar denies that, saying its forces were carrying out legitimate counterinsurgency operations.
The European Union and representatives of Muslim nations renewed calls for a broader worldwide investigation into violence in the western state of Rakhine, after the military said on Wednesday its soldiers had killed 10 captured Rohingya Muslim "terrorists" at the beginning of September. Security forces had to protect Inn Din village because it is surrounded by Muslim villages of which residents threatened the Inn Din villagers, it said.
The military statement claimed the killing of U Maung Ni by the terrorists and the continuing threat to ethnic people bred retaliatory attitudes, which eventually led the killings.
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Prime Minister Youssef Chahed called for calm, while at the same time affirming the right to demonstrate in the streets. Fresh clashes were reported across several towns for a third night on Wednesday.
"This grisly admission is a sharp departure from the army's policy of blanket denial of any wrongdoing", said James Gomez, Amnesty's regional director for Southeast Asia and the Pacific, following the military's announcement.
"However, it is only the tip of the iceberg and warrants serious independent investigation into what other atrocities were committed", he said in a statement.
Both the United Nations and USA have stated that he military's action has amounted to ethnic cleansing of the Rohingya Muslim minority in majority Buddhist Myanmar.
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