Myanmar's crackdown on Rohingya Muslims marks the "death of the Nobel Peace Prize", Iran's supreme leader said on Tuesday in a sharp attack on Burmese laureate Aung San Suu Kyi. 

"A cruel government, at the top of which sits a cruel woman who was awarded a Nobel prize, kills innocent people, sets fire to them, destroys their houses and displaces them and no tangible reaction is seen," Ayatollah Ali Khamenei said in a speech in Tehran.

Once lauded by the international community for standing up to the Myanmar military, Suu Kyi has been sharply criticised around the world for her failure to condemn brutal attacks on her country's Muslim minority now she is the effective leader. 

"Yes, they condemn it, issue statements, but what good does it do? They should take action. This marks the death of the Nobel Peace Prize," Khamenei said.

The United Nations says 370,000 Rohingya Muslims have fled Buddhist-majority Myanmar since the army launched a huge security operation in response to attacks by militants late last month.

UN human rights chief Zeid Ra'ad Al Hussein described the operation as a "textbook example of ethnic cleansing".

Khamenei said the problem was not about Buddhists and Muslims. 

"Maybe a few religious fanatics play a role, but a government is doing this. This is a political issue," he said.

"The solution is for Muslim governments to act. We are not saying they should send troops there, but impose political and economic pressure," Khamenei said.

He called on the Organisation of Islamic Cooperation to convene "for this specific purpose and to discuss what measures can be taken for these Muslims."

The Iranian Red Crescent has prepared an aid package for the Rohingya but is awaiting permission from Myanmar for its delivery, the Mizan Online news agency reported.