Thailand warned its conflict with neighboring Cambodia could “potentially develop into a war” as troops used rockets and artillery to shell targets along their contested border for a second day.

Acting Prime Minister Phumtham Wechayachai told reporters Friday that the severity of the clashes was escalating, endangering civilians, and Thailand was committed to defending its territory and sovereignty.

“This situation could potentially develop into a war,” Phumtham said. “At present, it is still considered an armed clash involving heavy weaponry.”

Cambodian Prime Minister Hun Manet said his country was ready for a ceasefire but accused Bangkok of backing out of a deal brokered by Malaysian Prime Minister Anwar Ibrahim, as the current chair of regional group Asean. The truce had been set for early Friday, he said.

Thailand’s government has put the latest death toll from the worst clashes in more than a decade at 14, including a soldier, with more than three dozen people injured. One Cambodian civilian was killed and five others injured in the clashes, Agence France-Presse reported, citing a provincial administration official.

Thailand also said it has evacuated more than 130,000 civilians from conflict zones. Cambodia has closed 260 schools in the province of Oddar Meanchey, the center of the conflict, the Khmer Times reported.

Thai financial markets were mixed amid the violence. The baht fell 0.4% to 32.39 per dollar, in line with regional peers, while the benchmark stock index rose 0.4% to cap a fifth straight weekly advance.

While the U.S., China, and Malaysia have reached out to both parties, no country has publicly emerged yet as a mediator.

Officials in Bangkok are intent on resolving the hostilities bilaterally, foreign ministry officials said Friday.

“We do appreciate their kind offers and do not rule them all out,” Russ Jalichandra, vice minister for foreign affairs, told Bloomberg News, adding that China, U.S. and Malaysia had offered to help. “But at the moment we still want to solve the problems bilaterally through negotiations, and existing bilateral mechanisms that both sides agreed upon,” he said, citing a memorandum signed in 2000.

Thailand will not be the first to call off military action, Russ said, adding that a ceasefire offer can be considered only if Cambodia ends hostilities.

On Friday, Chinese foreign minister Wang Yi said Beijing is willing to play a constructive role in easing military conflict and supports efforts by Asean to encourage dialog and a political settlement. In a meeting with Asean Secretary-General Kao Kim Hourn in Beijing, Wang also blamed the border clash on “legacy of western colonizers.”

The U.S. has engaged both sides, according to a person familiar, who asked not to be identified discussing private conversations. The embassy in Bangkok said in a statement that “we have consistently encouraged Thailand and Cambodia to resolve their differences peacefully in a manner that respects diplomatic obligations and norms.”

Thailand, a long-time Washington treaty ally, developed closer diplomatic relations with China during almost a decade of military-backed rule under previous Prime Minister Prayuth Chan-Ocha. The U.S., meanwhile, is the Southeast Asian nation’s largest exports destination, accounting for about 18% of all Thai shipments and creating a trade surplus of $46 billion last year.

But amid President Donald Trump’s tariff war, Vietnam, Thailand and Indonesia are among Asian countries seeing the sharpest surge in Chinese imports as the higher duties upend regional trade, according to Citigroup Inc.

China is Thailand’s largest trading partner with bilateral business estimated at $129 billion last year, according to the U.S. Census Bureau. Beijing shipped goods worth $81 billion to Thailand.

Trading accusations

Thailand and Cambodia have claimed they are operating only in self-defense, and the United Nations Security Council is scheduled to discuss the issue Friday in New York.

The Thai army said Cambodian forces “conducted sustained bombardment” using heavy weapons, field artillery and rockets through Friday morning, and that it responded appropriately and advised civilians to avoid the conflict zones. Cambodia’s defense ministry confirmed shelling overnight and claimed to control the site of two disputed temples and another area, according to the Khmer Times. It separately reported 40 workers are trapped at Preah Vihear temple, one of the points of conflict.

The clashes on Thursday included Thai airstrikes on Cambodian military bases using F-16 fighter jets, while Bangkok accused Phnom Penh’s forces of attacking civilian areas in Thailand. That followed a months-long border standoff that also pushed Thailand’s ruling coalition to the brink of collapse.

The neighbors share a long history of border tensions, though relations have remained largely stable since a deadly 2011 conflict that left dozens dead. The last major flare-up centered on the Preah Vihear temple, a longstanding flashpoint dating back to the French colonial era.

Much of the current dispute stems from maps drawn on differing interpretations of early 20th-century Franco-Siamese treaties, which defined the border between Thailand and Cambodia, then part of French Indochina.

Economic impact

A prolonged military conflict would add to multiple economic challenges for both nations, including the U.S. threat to impose stiff tariffs. Unlike neighboring Indonesia, the Philippines, and Vietnam — which have secured trade agreements with the Trump administration — export-reliant Thailand has yet to reach a deal.

Given the risks to Thailand’s local economy and tourism, a vital contributor to the economy, Bangkok may have more reasons to end the conflict as soon as possible, said Trinh Nguyen, Natixis senior economist for emerging Asia.

“We expect de-escalation to take place after aggressive actions,” Trinh said. “External risks are rising and Thailand cannot afford to derail already weak tourism and soft growth.”

Cambodia’s economic growth was already expected to slow, according to a July 17 report by Maybank Securities Pte., which noted the country’s dependence on the U.S. is the highest in Asean, at 38% of nominal exports or 21% of GDP.

The country also has more than half a million workers in Thailand, according to official estimates, though Maybank said undocumented migrants could push that number closer to 1.2 million people. Officials in Thailand’s Chanthaburi and Trat provinces said some 2,000 Cambodian migrant workers have gathered at a checkpoint to return home.

Thai exports to Cambodia totaled $5.1 billion in the first half of 2025, including jewelry, oil and sugar, with $732 million of imports, mostly fruit and vegetables, according to the Thai Commerce Ministry.

With Thailand signaling no immediate plan to cease the military actions, a drawn-out conflict poses fresh challenges to leader Paetongtarn Shinawatra, who had already been suspended as prime minister for her handling of the border dispute. Her Pheu Thai-led coalition has been on the brink after the defection of a key party last month left it with a slender majority.

Thai nationalist groups, who had initially planned an anti-government rally for Sunday, have pushed it back to Aug. 2. Posts supporting the Thai army and air force are trending on X and Facebook in Thailand.

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—With assistance from Katia Dmitrieva, Claire Jiao, Pathom Sangwongwanich and Lee Miller.

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