Thailand and Burma have clashed in an exchange of words after Thai troops traded artillery and mortar fire across the border with narcotics traders. Burma is threatening to use other means if diplomatic efforts fail to ease border tensions.
Burma has issued a strong diplomatic protest to Thailand over the reported shelling, a day after Thai troops reportedly traded fire with members of Burma's ethnic Wa people.
Many experts on the drug trade consider the United Wa State Army one of the world's most powerful drug militias, with as many as 20,000 troops.
Thailand said fighters from Burma's ethnic Shan people attacked two Wa Army positions. Bangkok said the Thai military fired warning shots when shells from that fighting fell into Thai territory.
Burma accused Thailand of firing in support of the Shan and providing them with arms. Burma's military government denies the Wa are involved in narcotics, and accuses the Shan army of drug trafficking.
Thailand says it faces a flood of up to 900 million amphetamine tablets produced by the Wa just inside Burma. Thousands of Thai troops, backed by dozens of tanks, have been on month-long military exercise near the northern border areas.
Recent reports in Bangkok indicate Burma agreed to moves to curtail drug trafficking by the Wa, following a recent visit to Thailand by Burma's second most powerful man in government, General Muang Aye.
But Tuesday, senior Burmese officials denied there was an agreement, and warned against Thai troops encroaching on Burma's territory.
Burma has accused Thailand of supporting terrorism and of backing attacks by the Shan State Army. The Shan have been fighting for greater autonomy from Rangoon for many years.