Around 3,500 migrants, mainly Rohingya from Myanmar or economic migrants from neighbouring Bangladesh, have come ashore in Southeast Asia in recent weeks in an ongoing migrant crisis.
Some 2,500 more are believed still trapped at sea, heaping pressure on both countries to take back the migrants and improve living conditions to stem the outflow.
Soon after the boat was found on Friday Myanmar authorities said the 727 passengers onboard were "Bengalis" and threatened to send them across the border.
On Tuesday officials in both Myanmar and Bangladesh said the packed boat was on its way to Rakhine -- a frequent upstream departure point for many Rohingya journeys south.
"It's heading to Rakhine. We heard they were being taken to Maungdaw by the navy but we can't confirm that," an unnamed official in Maungdaw, a town in the state, told AFP.
Bangladesh's Border Guard also said it had been told by its neighbour that the passengers would be taken to Maungdaw.
But in a warning to Myanmar, a coast guard official, Captain Shahidul Islam, said Bangladesh would block any attempt to push them across the frontier.
"This ship with migrants is being shifted to Maungdaw through Myanmar waters," he said.
"We have intensified patrols in our territory so that they cannot push back their citizens to Bangladesh territory."
The Rohingya flee Rakhine in droves each year to escape poverty and persecution in a region where their movements are controlled and they lack access to jobs or basic services.
Tens of thousands have languished in displacement camps in Rakhine since the violence.
An estimated 300,000 more scratch a living in the poor coastal area of neighbouring Bangladesh, but only around a tenth of them are officially recognised as refugees.
The status of the Rohingya is an incendiary issue in Myanmar as Buddhist nationalism surges.
But the country has faced intensifying pressure from the international community to extend citizenship rights to them.
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