Thai and Cambodia forces clashed on Saturday near a disputed ancient temple on land that both countries claim.
The fighting left one soldier dead and four injured, according to a Thai Army spokesman. A Thai villager was killed Friday, allegedly by Cambodian troops' artillery shells.
The two days of fighting mark a flare up in tensions between the Southeast Asian nations over land around the 11th century Preah Vihear temple. The building sits on a cliff on Cambodian land, but the entrance to the site is on the Thai side.
The temple has been a source of conflict for generations, reports Reuters.
"The International Court of Justice awarded it to Cambodia in 1962 but the ruling did not determine the ownership of the scrub next to the ruins, leaving considerable scope for disagreement," it states.
The United States urged both nations to exercise "maximum restraint." State Department spokesman P.J. Crowley called on the neighbors to "take all necessary steps to reduce tensions and avoid further conflict."
The Association of Southeast Asian Nations (ASEAN) warned that the fighting threatens the economic recovery of the region.
"The situation has escalated into open conflict. And that will definitely affect our economic development, confidence in our region, and tourism and prospects for foreign investment, which have just been picking up in light of the world economic recovery," former Thai foreign minister Surin Pitsuwan said in a statement.
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