Thai diplomats on Wednesday presented Cambodian officials with a request to detain and extradite Thaksin Shinawatra. The former prime minster is wanted in Thailand after fleeing a year ago to avoid a two-year jail sentence for corruption.
Cambodia responded with a diplomatic note rejecting the extradition request. The Cambodian government has said it considers Mr. Thaksin's conviction to be politically motivated.
Mr. Thaksin arrived Tuesday in Phnom Penh to take up a position as an economic adviser to Cambodian Prime Minister Hun Sen.
Cambodian and Thai media showed photographs of Mr. Hun Sen warmly greeting Mr. Thaksin.
The Thai government has indicated it may terminate its extradition treaty with Cambodia if Mr. Thaksin is not sent back to serve his sentence.
Kraisak Choonhavan is a member of Thailand's governing coalition. He says it may be necessary to call on the Association of Southeast Asian Nations to mediate an end the diplomat dispute.
"I think it is time now for the ASEAN Secretariat to step up, perhaps a shuttle diplomacy toward this unsettling issue, and that Hun Sen should reconsider to reduce this antagonistic approach toward Thailand. You can only see escalation and that's no good for anybody, not only on a bilateral basis but as an organization as a whole."
Thailand has not closed the border with Cambodia to avoid damaging their economies. Kiat Settheearmon is president of the Thailand Trade representative office.
"We want to ensure that the livelihood of the people is not affected by the current misunderstanding. I will say that and we will continue this path, whatever measures it might be it will be the least (impact) affecting the well being of the people of the two countries."
Relations between the two countries have been strained for a year because of a disputed ancient temple on their border. The temple is in Cambodian territory but a main approach to it is in Thailand.
There are concerns the soured diplomatic ties could spill over to the ASEAN meeting on the sidelines of the Asia Pacific Economic Cooperation forum under way in Singapore.
Mr. Thaksin, who was ousted in a coup in 2006, remains popular with the rural and urban poor. But many in the urban middle class accuse him of authoritarianism. Some political analysts in Thailand say he may have hurt his popularity by taking the post in Cambodia, and by making controversial comments on the revered Thai monarchy in an interview with a British newspaper.