The temple that was attacked also hosts a small encampment used by the army, like many others in a region plagued by a five-year insurgency that has left at least 3,700 people dead.
Muslims make up more than 90 per cent of the two million people in southern provinces of Yala, Pattani, Narathiwat and Songkhla.
Many complain of being treated as second-class citizens in mainly Buddhist Thailand.
The area was a semi-autonomous Islamic Malay sultanate until annexed by Thailand in 1902.
Several violent uprisings have been put down by the army over the century.
The latest uprising flared in January 2004 when fighters raided an army base, killing four soldiers.
Despite martial law imposed in 2004 and thousands of Thai troops in the region, frequent attacks blamed on Muslim fighters have left more than 3,700 people dead.
In March 2009, the government said 4,000 soldiers would be deployed to southern Thailand, supplementing more than 60,000 already stationed there.
Since the beginning of the month, at least 36 people have been killed and more than 100 wounded in violence in the region.
The deadliest recent incident was the killing of 10 Muslims at a mosque in Narathiwat in early June.
No one has claimed responsibility for that attack, but the Thai military maintains that the assailants had tried to make it look as if security forces were responsible.
The fighters in Thailand's southern provinces have not specifically stated their motives, but they are thought to be fighting to establish an independent state in the three Muslim-majority provinces.
In April, the Thai government announced it was extending emergency rule for another three months in the region, despite a promise in January by Abhisit Vejjajiva, the country's prime minister, to cancel the measure.
A month earlier, Abhisit announced that 4,000 more soldiers and other security personnel would be deployed to the region, supplementing more than 60,000, including local part-time forces, already stationed there.
The recent spike in violence with attacks on mosques and Buddhist temples has raised fears that a sectarian war could break out in the region.
Local observers have said that the Thai security forces are increasingly frustrated by their inability to curb the violence, and have been arming civilian self-defence forces - almost all Buddhist - to protect villagers.
Analysts have warned that the arming of what many see as poorly-trained residents with scores to settle could make the situation even more volatile.
|The mosque attack in Narathiwat province in early June left at least 10 people dead [AFP]
A recent report by Nonviolence International, US-based pacifist group, said that the ability to distinguish between security officers, insurgents and criminals in the area is increasingly difficult amid an atmosphere of suspicion and paranoia.
"Each new act of violence not only incites acts of revenge but also brings to the fore sentiments of nationalist extremism and ethno-religious divisions," the report added.
According to Lieutenant Colonel Chalermchai Sutinuan, the Thai army's field commander in Narathiwat, the recent spate of attacks has meant that the local Muslim and Buddhist communities, who had previously interacted normally, are no longer talking.
"There is complete silence,'' he told the Associated Press.
Thailand, a predominantly Buddhist nation, annexed the Muslim-majority south in the early 20th century.
The Muslims, who are ethnically distinct from Thais and speak Malay, have long complained of being treated as second-class citizens with inadequate educational and job opportunities.