Thailand's acting Prime Minister Phumtham Wechayachai warned Friday that cross-border clashes with Cambodia that have uprooted more than 130,000 people "could develop into war", as the countries traded deadly strikes for a second day.

A long-running border dispute erupted into intense fighting with jets, artillery, tanks and ground troops on Thursday, and the UN Security Council is set to hold an emergency meeting on the crisis later Friday.

A steady thump of artillery strikes could be heard from the Cambodian side of the border, where the province of Oddar Meanchey reported one civilian -- a 70-year-old man -- had been killed and five more wounded.

More than 138,000 people have been evacuated from Thailand's border regions, its health ministry said, reporting 15 fatalities -- 14 civilians and a soldier -- with a further 46 wounded, including 15 troops.

"We have tried to compromise as we are neighbours, but we have now instructed the Thai military to act immediately in case of urgency," said Wechayachai.