"Thailand's stance remains the same. If Cambodia doesn't withdraw its troops from the disputed border area, no observers will be sent there," Thai Prime Minister Abhisit Vejjajiva said.

Indonesia offered to send troops as observers to the area in which Thai and Cambodian armies have periodically clashed, resulting in the deaths of more than a dozen Thai soldiers and an undisclosed number of Cambodian soldiers.

The offer was made and initially accepted during a meeting between foreign delegations in Jakarta this week.

Thai Foreign Minister Kasit Piromya and his Cambodian counterpart Hor Namhong hammered out the agreement. They made the deal after a failed meeting between Abhisit and Cambodian Prime Minister Hun Sen at the Association of Southeast Asian Nations summit Sunday.

"The achievement this afternoon exceeded my expectations," Indonesian Foreign Minister Marty Natalegawa told media after the agreement.

The latest series of clashes between Thailand and Cambodia began in February. The fighting has been condemned by the United Nations and ASEAN, to which Thailand and Cambodia belong.

One of the main areas in the dispute is near the 900-year-old Preah Vihear temple, since 2008 a World Heritage site, in the Dangrek Mountains on the Thai-Cambodia border 300 miles east of Bangkok.

The International Court of Justice ruled in 1962 that the temple was on Cambodian land but some access to the mountaintop site passes through Thai territory, a route that Thai troops occasionally seal off.

Fighting has flared in the area within the past several years, notably in October 2008 when two Cambodian troops died and seven Thai troops were wounded in an hourlong gun battle.

Thai and Cambodian field commanders agreed to a cease-fire in late April but it was quickly broken, with both sides blaming the other.

This week Thailand's army requested customs officers to slow down the export to Cambodia of fuel and other strategic products that the Cambodian military could use to support their troops in operations against Thai forces.

Products include vehicle fuel, oil and natural gas.

The border remains open in many place and local people are allowed to pass, as well as some tourists, Bangkok's media report.

Abhisit's hardening position comes after this week's announcement that Thailand will go to the polls July 3 in a national election.

The poll will be the first for Abhisit, whose coalition government came to power in 2008 after a court dissolved the then governing party.

It also comes a year after anti-government riots and protests disrupted several central areas of Bangkok, leaving more than 90 people dead.

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