At least a dozen "internal and external terrorists" - identified as 88 Generation Students, who fled after a bloody political crackdown in 1988 - completed small-arms training near Burma's border with Thailand and have entered Rangoon, administrative capital Naypyidaw and northern centre Mandalay, the New Light of Myanmar newspaper said.
The newspaper said these "terrorists" were trained by the All Burma Students' Democratic Front (ABSDF) and planned to "jeopardise peace and stability". It called on the public to expose them.
The ABSDF was formed in 1988 after the junta crushed pro-democracy demonstrations. Many fled to rebel-controlled areas along the Thai-Burmese border, where they took up arms against the military government.
A National Convention to draft a new constitution is scheduled to resume on July 18, at Nyaunghnapin Convention Centre, 45 kilometres north of Rangoon. The ruling State Peace Development Council (SPDC) says the convention is the first of seven steps on a "road map to democracy".
Critics including opposition Nation-al League for Democracy (NLD) called the process a "sham". SPDC hand-picked most of the convention's 1,000 delegates and no timetable has been announced for completion of the process.
The convention first convened in 1993, but it was aborted in 1996 after NLD delegates walked out in protest, saying it was undemocratic. The convention was resurrected in 2004.
Burma has been without a constitution since 1988, when its 1974 charter was suspended. Burma has been under military rule since 1962.
The newspaper also slammed the International Committee of the Red Cross for accusing the junta of human-rights abuses. It also accused the ICRC of colluding with rebels.