The skirmishes came after Thailand recalled its ambassador to Cambodia late on Wednesday and said it would expel Cambodia's envoy in Bangkok, after a second Thai soldier in the space of a week lost a limb to a landmine that Bangkok alleged had been laid recently in the disputed area.

Thai residents in the Surin border province fled to shelters built of concrete and fortified with sandbags and car tires as the two countries exchanged fire.

"How many rounds have been fired? It's countless," an unidentified woman told the Thai Public Broadcasting Service (TPBS) while hiding in the shelter with gunfire and explosions heard intermittently in the background.

For more than a century, Thailand and Cambodia have contested sovereignty at various undemarcated points along their 817km land border, which has led to skirmishes over several years and at least a dozen deaths, including during a weeklong exchange of artillery in 2011.

Tensions were reignited in May following the killing of a Cambodian soldier during a brief exchange of gunfire, which escalated into a full-blown diplomatic crisis and now has triggered armed clashes.

LANDMINES

The clashes began early on Thursday near the disputed Ta Moan Thom temple along the eastern border between Cambodia and Thailand, around 360km from the Thai capital Bangkok.

"Artillery shell fell on people's homes," Sutthirot Charoenthanasak, district chief of Kabcheing in Surin province, told Reuters, describing the firing by the Cambodian side.

"Two people have died," he said, adding that district authorities had evacuated 40,000 civilians from 86 villages near the border to safer locations.

Thailand's military said Cambodia deployed a surveillance drone before sending troops with heavy weapons to an area near the temple.

Cambodian troops opened fire and two Thai soldiers were wounded, a Thai army spokesperson said, adding Cambodia had used multiple weapons, including rocket launchers.

A spokesperson for Cambodia's defence ministry, however, said there had been an unprovoked incursion by Thai troops and Cambodian forces had responded in self-defence.

Thailand's acting Prime Minister Phumtham Wechayachai said the situation was delicate. "We have to be careful," he told reporters."We will follow international law."

An attempt by now-suspended Thai Prime Minister Paetongtarn Shinawatra to resolve the recent tensions via a call with Cambodia's influential former Prime Minister Hun Sen, the contents of which were leaked, kicked off a political storm in Thailand, leading to her suspension by a court.

Hun Sen said in a Facebook post that two Cambodian provinces had come under shelling from the Thai military.

Thailand this week accused Cambodia of placing landmines in a disputed area that injured three soldiers. Phnom Penh denied the claim and said the soldiers had veered off agreed routes and triggered a mine left behind from decades of war.

Cambodia has many landmines left over from its civil war decades ago, numbering in the millions according to de-mining groups.