A Thai soldier allegedly opened fire on villagers before turning the gun on himself while on duty near the Cambodian border.

Private Ratthapoom Thepsiri of the 1623rd Infantry Company was said to have shot at civilians with an assault rifle, injuring two people in Surin province, on Friday morning.

Colonel Ritcha Suksuwanon, Royal Thai Army deputy spokesman, said a barrage of gunfire was reported near the Ban Khuean Kaeo Temple at 12:45 am local time. When officers arrived at the scene, they found Ratthapoom missing from his post along with a rifle and ammunition.

Two residents were injured nearby and given first aid.

Anuwat Singchai, 32, was shot in the right lung while Wuttana Naprokon, 35, suffered a shrapnel wound on his foot. Both were taken to the Kap Choeng Hospital and are now out of danger.

Lieutenant General Boonsin Phadklang, Commander of the Second Army Region, said soldiers and police were dispatched to locate the rampaging troop, who was believed to have suffered a mental breakdown from the recent border clashes.

Authorities said they were prepared to negotiate with Ratthapoom, but he was found dead in the forest near his home at 10:40 am. His body has been collected to undergo a post-mortem exam.

Army spokesman Major General Winthai Suvari said: 'He had mental health issues, but he wasn't acting manic or showing any extreme emotional outbursts. He was able to function normally while on duty, despite being a quiet individual who had to talk more in high-stress environments.'

He added the deceased had previously been deployed at the dispute Ta Muen Thom Temple was shifted to Surin province before his meltdown.

Army officials said psychological assessments were conducted following the incident to determine 'at-risk' personnel.

A bloody military confrontation flared in long-disputed border areas as Thailand and Cambodia accused each other of instigating the violence on July 24.

The Thai army claimed the clash began when six armed Cambodian soldiers approached a Thai outpost after a drone was heard near a disputed Khmer temple. Thai troops said they shouted warnings and claimed the Cambodians opened fire first.

However, Cambodia's Defense Ministry accused Thailand of provoking the violence, saying its forces acted in self-defense.

Officials said at least dozens of people have been killed and more than 300,000 displaced on both sides of the border.

Both sides have reached a shaky truce following talks facilitated by Malaysian Prime Minister Anwar Ibrahim, chair of the Association of Southeast Asian Nations (ASEAN).