Fighting raged at Myanmar’s eastern border with Thailand on Saturday, both governments said, forcing 3,000 civilians to flee as rebels fought to flush out Myanmar junta troops holed up for days at a bridge border crossing.

Resistance fighters and ethnic minority rebels seized the key trading town of Myawaddy on the Myanmar side of the frontier on 11 April, a blow to a well-equipped military struggling to govern and facing a test of battlefield credibility.

Witnesses on the Thai and Myanmar sides of the border said they heard explosions and heavy machine gun fire near a strategic bridge from late on Friday into Saturday.

Thai broadcaster NBT, in a post on X, said resistance forces used 40mm machine guns and dropped 20 bombs from drones to target an estimated 200 junta soldiers who had retreated from a coordinated rebel assault on Myawaddy and army posts since 5 April.

Myanmar’s state-run MRTV in its nightly newscast said the militias and ethnic minority rebels had used excessive shelling and bombing to attack junta troops, and government forces had responded with airstrikes to try to maintain stability. It said rebels retreated having sustained many losses.

Reuters could not immediately verify the accounts of the fighting.

Thailand’s prime minister, Srettha Thavisin, said he was closely monitoring the unrest and his country was ready to provide humanitarian assistance if necessary.

According to figures compiled by Thailand’s military and the provincial authority, 3,027 people had on Saturday crossed the border to seek temporary refuge in the town of Mae Sot.

Myanmar villagers cross the Moei river at the Thai-Myanmar border district of Mae Sot, fleeing heavy fighting between the rebels and the junta. Photograph: Somrerk Kosolwitthayanant/EPA

Myanmar’s military is facing its biggest challenge since taking control of the former British colony in 1962, caught up in multiple, low-intensity conflicts and grappling to stabilise an economy that has crumbled since a 2021 coup against Nobel laureate Aung San Suu Kyi’s government.

The country is locked in a civil war between the military on one side and, on the other, a loose alliance of established ethnic minority armies and a resistance movement born out of the junta’s bloody crackdown on anti-coup protests.

Srettha said he had instructed all Thai agencies to prepare for all situations and would visit the border area on Tuesday.

The Thai PM said on X: “I do not desire to see any such clashes have any impact on the territorial integrity of Thailand and we are ready to protect our borders and the safety of our people.”

The capture of Myawaddy and surrounding army outposts is a significant setback for a junta that has been squeezed by western sanctions, with the town a key tax revenue source and conduit for more than $1bn (£810m) of annual border trade.

Thailand’s foreign ministry said it hoped the situation would normalise soon and had urged Myanmar’s government to ensure fighting did not spill over the border.

Thai ambassador Nikorndej Balankura said: “We have notified Myanmar’s embassy in Thailand for Myanmar to exercise caution so as to not violate Thai sovereign territory and airspace and affect the safety of people at the border.”

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