One of the youths was identified as the son of a local militia official, but police say the firearm seized did not belong to his father.
Three Burmese army servicemen under investigation for the death of five local villagers in northern Shan State’s Lashio Township in June have confessed to the killings at a military tribunal.
Shan Human Rights Foundation said it is calling for an official investigation into the murders of seven villagers in Mong Yaw village, Lashio District.
The Burmese military dismissed independent and social media reports claiming the deceased were local villagers who had been abducted by the Burmese army.
Bodies were exhumed from shallow graves in a cornfield, nearly a week after they were detained by a Burmese army unit on suspicion of being rebel supporters.
The attacks come after a period of relative calm in the town following a crackdown on youth brawls five months ago.