SURIN, Thailand: Thailand's acting Prime Minister Phumtham Wechayachai warned Friday (Jul 25) that cross-border clashes with Cambodia that have uprooted more than 130,000 people"could develop into war", as the countries traded deadly strikes for a second day.

A long-running border dispute erupted into intense fighting with jets, artillery, tanks and ground troops on Thursday, and the United Nations Security Council is set to hold an emergency meeting on the crisis later Friday.

A steady thump of artillery strikes could be heard from the Cambodian side of the border, where the province of Oddar Meanchey reported one civilian - a 70-year-old man - had been killed and five more wounded.

More than 138,000 people have been evacuated from Thailand's border regions, its health ministry said, reporting 15 fatalities - 14 civilians and a soldier - with a further 46 wounded, including 15 troops.

"We have tried to compromise as we are neighbours, but we have now instructed the Thai military to act immediately in case of urgency," said Wechayachai.

"If the situation escalates, it could develop into war, though for now, it remains limited to clashes," he told reporters in Bangkok.

In the Cambodian town of Samraong, 20km from the border, AFP journalists saw families speeding away in vehicles with their children and belongings as gunfire erupted.

"I live very close to the border. We are scared because they began shooting again at about 6am (7am, Singapore time)," Pro Bak, 41, told AFP.

He was taking his wife and children to a Buddhist temple to seek refuge.

"I don't know when we could return home," he said.

AFP journalists also saw soldiers rushing to man rocket launchers and speeding off towards the frontier.

Malaysian Prime Minister Anwar Ibrahim, whose country currently holds the chair of regional bloc ASEAN, said he held talks with both countries leaders on Thursday and called for a ceasefire and dialogue.

"I welcome the positive signals and willingness shown by both Bangkok and Phnom Penh to consider this path forward," he said in a Facebook post late on Thursday.

But despite Anwar's optimism, fighting resumed in three areas around 4am on Friday, the Thai army said.

Cambodian forces carried out bombardments with heavy weapons, field artillery, and BM-21 rocket systems, the army said, and Thai troops responded"with appropriate supporting fire".

CALLS FOR CALM

The fighting marks a dramatic escalation in a long-running dispute between the neighbours - both popular destinations for millions of foreign tourists - over their shared 800km frontier.

Dozens of kilometres in several areas are contested and fighting broke out between 2008 and 2011, leaving at least 28 people dead and tens of thousands displaced.

A UN court ruling in 2013 settled the matter for over a decade, but the current crisis erupted in May when a Cambodian soldier was killed in a new clash.

Fighting on Thursday was focused on six locations, according to the Thai army, including around two ancient temples.

Ground troops backed up by tanks battled for control of territory, while Cambodia fired rockets and shells into Thailand and the Thais scrambled F-16 jets to hit military targets across the border.

Both sides blamed each other for firing first, while Thailand accused Cambodia of targeting civilian infrastructure, including a hospital hit by shells and a petrol station hit by at least one rocket.

Thursday's clashes came hours after Thailand expelled the Cambodian ambassador and recalled its own envoy after five members of a Thai military patrol were wounded by a landmine.

Cambodia downgraded ties to"the lowest level" on Thursday, pulling out all but one of its diplomats and expelling their Thai equivalents from Phnom Penh.

At the request of Cambodian Prime Minister Hun Manet, the UN Security Council will hold an emergency meeting on Friday to discuss the deadly clashes, diplomatic sources told AFP.

The United States urged an"immediate" end to the conflict, while Cambodia's former colonial ruler France made a similar call.

The EU and China - a close ally of Phnom Penh - said they were"deeply concerned" about the clashes, calling for dialogue.

Zachary Abuza, a professor from the National Defense University's National War College in Washington DC, said there is"a substantial disparity" between the two armed forces.

"The Thai military is one of the largest in Southeast Asia. It's far better resourced," he added.

"As the Thai have shown with the airstrikes, they have the ability to hit with far greater precision. But what I would say about the Cambodian side is they certainly have a much greater propensity to take risks."

Abuza told CNA's Asia First that he was taken by surprise by the current escalation.