Cambodia and Thailand's top defence officials agreed on Thursday to allow observers from the Asean regional bloc to inspect disputed border areas and help ensure hostilities do not resume following a violent five-day conflict that ended in a ceasefire late in July.

The Southeast Asian neighbours saw the worst fighting in over a decade in July, including exchanges of artillery fire and jet fighter bombing runs that claimed at least 43 lives and displaced more than 300,000 people on both sides of the border.

Fighting continued despite diplomatic interventions from China and Malaysia, chair of the regional bloc Asean, both calling for restraint.

Cambodian Defence Minister Tea Seiha and Thailand's acting defence minister Nattaphon Narkphanit met at Malaysia's Armed Forces headquarters in Kuala Lumpur on Thursday to thrash out the terms of a permanent cessation of hostilities.

"There will be an observation team of Asean military attaches based in Thailand and Cambodia, led by Malaysia," Nattaphon said after the meeting, adding that foreign inspectors based in either country would not cross the border.

"Thailand and Cambodia are neighbours with a shared border that can move away from each other ... a resolution will allow our people to return to peaceful lives," he said.

Thailand and Cambodia said in a joint statement that they would hold more talks in two weeks and then again in a month.

The peace conditions were formulated during three days of talks between senior officials in Kuala Lumpur and finalised on the fourth day in the presence of observers from China and the United States.

"Both sides agreed on the terms of implementation of the ceasefire and improving communication between the two armies," Cambodian Prime Minister Hun Manet said on social media.

Thailand and Cambodia have quarrelled for decades over undemarcated parts of their 817-kilometre land border, which was first mapped by France in 1907 when the latter was its colony. (Reuters)