CEBU, Philippines - The leaders of Thailand and Cambodia agreed on Thursday to pursue trust-building measures to advance a fragile ceasefire and establish peace, after rare talks over last year's deadly fighting between the two neighbors.

Troops remain deployed on both sides of their long-disputed 817-km (508-mile) border after battles in July and December when skirmishes quickly escalated into air strikes and heavy exchanges of artillery and rockets.

The Philippines, which is hosting meetings of the Association of Southeast Asian Nations on the island of Cebu, arranged the talks between Cambodian Prime Minister Hun Manet and Thai counterpart Anutin Charnvirakul, after months without engagement.

"Thailand and Cambodia are two neighboring countries. It is best that we avoid conflict, it only brings losses and suffering," said Anutin, who was swept back to power in a February election on a wave of nationalism fuelled by the conflict.

"Now is the time for us to look forward and walk this path together towards peace."

Close to 150 people were killed and at least 300,000 displaced by the two rounds of fighting, which each country accused the other of starting.

TRUMP INTERVENTION

The first outbreak was settled in July after five days following an intervention by U.S. President Donald Trump, who oversaw the signing of a troop withdrawal pact in October during an ASEAN summit.

But Trump was unsuccessful in efforts to halt a second flare-up, despite saying he had rescued the ceasefire, with clashes raging for 20 days before both sides agreed bilaterally to a truce.

Hun Manet said the countries' foreign ministers would hold further discussions and carry them forward in a way that can deliver results.

"Our discussions focused on de-escalation and trust-building measures to restore and consolidate a functioning framework for lasting peace and normalised relations," he said.

The meeting comes at a time of increased strain after Thailand announced on Tuesday its unilateral termination of an agreement with Cambodia on joint offshore energy exploration, defying calls from its neighbour to stick with the 25-year-old pact.

Cambodia said it had no option but to seek formal resolution of overlapping claims in the Gulf of Thailand under the provisions of the United Nations Convention on the Law of the Sea, or UNCLOS.

Thursday's talks were overseen by Philippine President Ferdinand Marcos Jr, who said both sides had agreed to exercise restraint and engage constructively.

"This was possible because of a very clear, fervent belief by both leaders that it is time for peace and no longer a time for war," he said.

-Reporting by Mikhail Flores in Cebu, Philippines and Panarat Thepgumpanat in Bangkok; Writing by Martin Petty; Editing by Clarence Fernandez, Alexandra Hudson/Reuters