The fighting marks an escalation of a century-old conflict between the two South East Asian neighbours.
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Why are Thailand and Cambodia fighting?
The dispute dates back to more than a hundred years ago, when the borders of the two nations were drawn after the French occupation of Cambodia.
Things officially became hostile in 2008, when Cambodia tried to register an 11th Century temple located in the disputed area as a Unesco World Heritage Site - a move that was met with heated protest from Thailand.
There were sporadic clashes over the years that saw soldiers and civilians killed on both sides.
The latest tensions ramped up in May after a Cambodian soldier was killed in a clash. This plunged bilateral ties to their lowest point in more than a decade.
In the past two months, both countries have imposed border restrictions on one another. Cambodia banned imports from Thailand such as fruits and vegetables, and stopped importing power and internet services.
Both countries have also strengthened troop presence along the border in recent weeks.
Where is the conflict headed?
Thailand's acting premier Phumtham Wechayachai said that its dispute with Cambodia remains "delicate" and must be addressed with care, and in line with international law.
Cambodian Prime Minister Hun Manet said his country wants to resolve the dispute peacefully and that it has "no choice" but to "respond with armed force against armed aggression".
While there have been serious exchanges of fire in the past, they de-escalated relatively quickly.
While it appears the fighting is unlikely to blow up into a full scale war, at the moment there is a lack of leadership in both countries with the strength and confidence to pull back from this confrontation.
Hun Manet, the son of a former strongman, does not yet really have his own authority. Hun Sen, his father, appears willing to push this conflict further in order to burnish his own nationalist credentials.
In Thailand, there is a shaky coalition government, backed by another former strongman Thaksin Shinawatra.
Thaksin believed he had a close personal relationship with Hun Sen and his family, and feels betrayed by Hun Sen's decision to
leak a private conversation which led to his daughter, Paetongtarn Shinawatra, being suspended as prime minister.