A brightly-patterned hot air balloon spitting fireworks soared into the night sky above Myanmar's Shan state as a much-loved festival returned, but crowds stayed away from the military-backed event as violent clashes swell across the country.

Tuesday marked the return of the Tazaungdaing festival to the city of Taunggyi after a three-year hiatus due to the coronavirus pandemic and unrest following the military seizing power in 2021.

The usually riotous event sees teams load batteries of fireworks into homemade hot air balloons, with referees judging both the design of the contraptions and the magnificence of their aerial explosions.

But this year's military-managed celebration was muted, with revellers staying away and a heavy presence of security personnel deployed as the junta battles coordinated attacks across the country.

Masked soldiers stood watch next to a signal-jamming truck, and the shadows of others standing guard on the surrounding hills were silhouetted against the dusk sky.

A convoy of four-wheel-drive vehicles delivered local dignitaries -- some accompanied by pro-military militia bodyguards -- to the stage, where they watched hundreds of school and college students perform synchronised dances.

In the spectators' area across the fence -- usually packed with revellers -- people sat on blankets in small scattered groups.

"There are fewer people coming this year," said Nu Nu Sein, 70.

"I'm really sorry. Many more people should be here."

Launching the balloons requires teamwork and daring.

Team members hold up the heavy canvas balloons and inflate them by holding flaming torches underneath.

Once the balloon has filled with hot air, they attach a wooden frame loaded with fireworks, light the fuse and release the balloon.

The payload is timed to go off once the balloon has achieved a safe height, but in the past there have been injuries and even deaths from mistimed firings.

On Tuesday, teams banged drums and cymbals as each balloon was launched into the sky, the clamour competing with dance music thumping from a nearby fairground.

Win Aung, 54, said he enjoyed the event, despite the thinner crowds.

"We have to do it with the people we have here," he said after his team had launched their balloon.

"I really enjoy playing with gunpowder... I can't stand by when this festival arrives."

Fighting rages 

A rock band on a stage belted out old favourites, including one wistful number about pretty Shan ladies selling local delicacies on the road to the town of Muse on the China border.

That road has been cut by an offensive launched last month by an armed alliance of ethnic minority groups across a swathe of northern Shan state.

The move has hampered the junta's ability to send reinforcements to tackle the offensive, which has seized a cross-border trade hub and dozens of military outposts.

Muse previously handled a sizeable share of border commerce with Myanmar's biggest trade partner, China, and the recent blockage is denying the cash-strapped junta taxes and foreign exchange.

In recent days junta-controlled media have published notices denying petrol shortages and restrictions on withdrawals at banks.

Wednesday's edition of the Global New Light of Myanmar refuted "false news" that young people were being press-ganged from the streets into serving as porters for the military.

The clashes in the north have galvanised other opponents of the junta, who have launched attacks in the east and west of the country in what analysts say is the biggest challenge to the military leadership since it seized power.

On Tuesday the military and anti-coup fighters said they were battling for control of a state capital in the east.

Anti-coup fighters also launched drone attacks on two airports in northern Sagaing region, hundreds of kilometres from Kayah, junta spokesman Zaw Min Tun said.

"I'm also scared coming here," said Nu Nu Sein at the ground in Taunggyi.

"I was asked not to go to very crowded places."

"I want all to be peaceful and happy. I wish no one had to face the situation like this."