A Burmese flag is seen behind a loaded Thai machine gun

Thai television reports showed ethnic rebels hiding in long grass and firing automatic weapons at a Burmese military outpost.

Some reports say 10 Burmese soldiers were killed. There has been no word from the Burmese military government.

The Shan State Army has fought the Burmese government forces for several decades to try to secure an autonomous Shan state.

Burma has accused Thailand of providing moral and military support to the rebels.

Checkpoint closed

Thai Prime Minister Thaksin Shinawatra confirmed on Wednesday that the fighting took place on Burmese soil, and said Thai forces would ensure the security of Thai people along the border.

Thai soldiers stand guard at the Mae Sai checkpoint

The Mae Sai checkpoint has been closed amid Thai unease over a build-up of Burmese troops and fears of new fighting.

Thailand has also bolstered troops in the area.

Talks last week to ease the tense border failed as both sides demanded compensation for the loss of lives and damaged property.

Burma has also insisted that a border demarcation dispute be resolved before it withdraws any troops.

The United States has issued an advisory warning its citizens to exercise caution in the border area.

Burmese 'threat'

A prominent Burmese dissident group has said the border skirmishes demonstrated that the Burmese regime represented a "major threat in destabilising the region".

Thai forces have been bolstered at the border

"This is not only a security crisis for Thailand, but also a problem for [the south-east Asian group] Asean as the region moves towards great integration," said the All Burma Students' Democratic Front.

It said the junta did not respect Thai sovereignty and that conflict would break out periodically until democracy was established.

"Democracy will not only resolve the border conflict but lead to resolution of other key problems including drugs, refugees and illegal immigration," the group said.