Thailand and Cambodia have decided to normalize diplomatic relations after nearly a year.
Tensions flared between Thailand and Cambodia when former Thai Prime Minister Thaksin Shinawatra, who is wanted in Bangkok on corruption charges, took a post as an economic advisor to the Phnom Penh government.
But Mr. Thaksin has given up the post and the Thai foreign ministry says ambassadors will return to their posts in the two countries. The foreign ministry also thanked Cambodia for its cooperation in "boosting bilateral relations."
Mr. Thaksin was ousted in a coup in 2006 and has lived in exile since 2008. He has close links with Cambodia's Prime Minister Hun Sen, and has business interests in Cambodia.
The Cambodian Foreign Ministry says Mr. Thaksin resigned his post for personal reasons.
His resignation and renewed diplomatic relations are important steps toward ending tensions said Hang Chhaya, the executive director of the Khmer Institute for Democracy in Phnom Penh.
"So this is a positive step, I think, by Mr. Thaksin resigning. You can see how quickly the Thai government has sent the ambassador back to Phnom Penh and Cambodia also did the same,” he said. “This is good in terms of the two counties can actually work together now that they have diplomatic relations back to normal."
Hang Chhaya said diplomatic efforts, including those by the Association of Southeast Asian Nations, the United States and China, helped improve relations.
"So ASEAN in a sense act like a caretaker in this region and maybe to help to save face, because imagine if Thailand and Cambodia enter into a war. That would be a disaster for them."
Mr. Thaksin's appointment to the Cambodian post led Thailand to withdraw support for agreements on overlapping maritime claims in the Gulf of Thailand.
The Thaksin dispute aggravated friction over Cambodia's management plan for a 900-year-old Khmer temple on the border. The Preah Vihear temple lies inside the Cambodian border on the top of a cliff. But access to the complex is largely only available from the Thai side.
In 1962, the International Court of Justice ruled the temple is Cambodian territory, but failed to determine ownership of an adjacent piece of land that Thailand controls. Thailand was angered when Phnom Penh independently sought a World Heritage listing for the temple two years ago.
There have small military clashes around the temple since. Talks about the dispute are expected in October.