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Thai and Cambodian soldiers have exchanged gunfire along a disputed section of their border, leaving two Cambodian soldiers dead.
Cambodia's foreign minister also said 10 Thai troops had been captured, but Bangkok has not confirmed this.
The clash, near the ancient Preah Vihear temple, has prompted Thailand to urge its nationals to leave Cambodia.
Tension has been high since July, when hundreds of soldiers on both sides faced off meters apart.
Both countries claim they own the area around the temple, which recently became a Unesco World Heritage site.
Officials from both countries have said the other side fired first.
'Good neighbor'
The exchanges of small arms fire and rocket-propelled grenades were reported to have continued for about one hour.
Cambodian Foreign Minister Hor Namhong said two soldiers had been killed and two wounded while Thai officials said five Thai troops had been wounded.
Hor Namhong said another 10 Thai soldiers had been captured but would be well treated and returned home if Bangkok requested.
But he said Cambodia remained "committed to solving the problems through peaceful means".
A Cambodian army official told the Associated Press news agency that commanders from both sides were trying to negotiate a ceasefire.
Thai Prime Minister Somchai Wongsawat said the fighting was "small scale" and that he was committed to reaching a settlement over the issue.
"Cambodia is a good neighbor. We will use peaceful means. If there is violence, we have to negotiate," he said.
After the fighting broke out, Thailand alerted air force jets and readied transport planes to evacuate Thai nationals from Cambodia.
The military stand-off began in July when Cambodian troops detained three Thai protesters who had entered the site illegally.
More than 1,000 soldiers from both countries moved into the area, digging trenches into the rough terrain around the temple.
August saw an agreement to withdraw most of the troops from the area but tensions flared again recently.
One Cambodian and two Thai soldiers were wounded in an exchange of gunfire earlier in October.
'Death zone'
Hor Namhong said that talks on the dispute which had been scheduled for Thursday would still go ahead, reports Reuters.
"It is a good sign that we can start to solve this conflict. We consider this an incident between soldiers and not an invasion by Thailand," said Hor Namhong.
The two sides have already held several rounds of talks, but have failed to reach a settlement.
On Tuesday, Cambodian Prime Minister Hun Sen threatened to turn the area into a "death zone" if the Thai troops did not withdraw.
Thailand denied that its troops had entered Cambodian territory.
The stand-off between the two countries centers on 1.8 square miles (4.6 sq km) of scrub near the 900-year-old Preah Vihear temple, which sits on a jungle-clad escarpment dividing the countries.
The temple is only accessible from Thailand and the area around it is heavily mined - a legacy of Cambodia's long war against the Khmer Rouge guerrillas.
An international court awarded the temple to Cambodia in 1962, but land surrounding it remains the subject of rival territorial claims.
The decision by the UN in June to list Preah Vihear as a World Heritage Site reignited lingering nationalist tensions.
Disputes between the two countries date back centuries when the Thai and Khmer monarchs fought each other for territory and power.
In 2003, the Thai embassy in Phnom Penh was torched by rioters angry over the alleged comments of a Thai actress who said that the Angkor Wat temple complex should be returned to Thailand.
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Cambodia map
BBC
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