Rebel ethnic troops are attacking the Myanmar government's last holdout in Myawaddy, on the border, and many people there are seeking passes to enter adjacent Tak province in Thailand.
Col Nathakorn Rueantip, commander of the Ratchamanu special unit, said the attack on the Battalion 275 base started on Tuesday night and continued on Wednesday.
The battalion's base is about 14 kilometres from the border with Thailand. The rebels had laid seige to the stronghold, attacking it with gunfire, artillery and drones.
Myanmar government troops were responding with artillery and grenade launchers and air strikes. Fires were burning around the base, he said. The gunfire could be heard from Thai soil overnight.
Col Nathakorn said soldiers of the Ratchamanu unit were patrolling along the bank of the Moei River, which marks the border in Tak province, and were well prepared for any situation.
Many residents of Myawaddy were seeking border passes to cross into Tak, fearful of air strikes on their communities.
Third Army chief Lt Gen Prasan Saengsirirak said the Myanmar government had not lost Myawaddy, and there were no refugees. He said there were battles between Myanmar government soldiers and ethnic troops around Myawaddy.
Prime Minister Srettha Thavisin said Thailand remained neutral on the issue. Measures were in place to handle refugees, if there were any.