Colonel Sunsern Kaewkumnerd, a Thai army spokesman, blamed the Cambodians started the battle, which he said only lasted for about 40 minutes.
"It was triggered by a Thai patrol unit's encounter with their Cambodian counterpart ... the Cambodian side ignited fighting with rifles," He said.
Sunsern said that he believed the ongoing talks between the two armies would prevent the situation from escalating.
The US state department and the UK separately urged both sides to show restraint over the standoff.
Sompong Amornvivat, Thailand's foreign minister, called on Thai nationals in Cambodia to leave as soon as possible.
"Thai businessmen who have no need to be in Cambodia now, please rush back to Thailand ... We have our evacuation plan ready," Sompong said.
The border clash came after Cambodia had said that 500 Thai troops had started to deploy close to the area containing the ancient Preah Vihear temple.
Thai television on Wednesday showed military lorries loaded with tanks heading toward the border and troops setting up mortars, while the Thai air force said their fighter jets were on stand-by.
"Normally we have fighter jets on stand-by at various regional headquarters ready for operation within five minutes, but under the current circumstances we have increased our readiness," Group Captain Montol Suchookorn, the Thai air force spokesman, said.
Before the fighting broke out on Wednesday, Somchai Wongsawat, the Thai prime minister, gave assurances that Thailand would not resort to violence and that talks would resume.
"If there is a problem, we will use peaceful means with an emphasis on negotiations," he said.
"I want to insist that we will use peaceful negotiations. We will not be an invader. We will not use violence."
Selina Downes, Al Jazeera's correspondent in Bangkok, said that the latest fighting highlighted the depth of tensions between Cambodia and Thailand over the temple.
"Both sides have said in recent days that they are trying to protect their sovereignty, which seems to be at the core of this dispute," she said.
|Civilians left the disputed border area as tension mounted [Reuters]
"Thailand has said that the section of land [containing the temple] is theirs but Cambodia is also fighting through the international courts for the temple, which they believe is rightfully theirs."
On Tuesday morning, Hun Sen, the Cambodian prime minister, said Thai troops had tried to advance into Cambodia's territory but that Cambodian soldiers had "waved them back".
"They must withdraw," he had told an economic conference in Phnom Penh, giving a noon deadline and warning of "armed clashes" if Thai troops continued to "trespass" across the border.
Brigadier-General Yim Pim, a Cambodian army commander, later said all Thai troops had retreated about 90 minutes before the deadline and returned to camp.
A Thai army spokesman initially denied Yim's claim but General Viboonsak Neepan, the Thai army's regional commander, later said that troops on both sides had pulled back slightly.
At the centre of the dispute is Preah Vihear, a 11th century Hindu temple which the UN listed as a World Heritage Site in July, a ruling that re-ignited a decades-old feud.
Both countries have long claimed the temple but the World Court awarded it to Cambodia in 1962.