DESPITE Prime Minister Thaksin Shinawatra's diligence at repairing Thailand's frayed relations with its neighbour Burma, he is headed for another bad patch.
This time, he is forced to order the withdrawal of Thai troops from the border with Burma after Rangoon closed all the crossing points between the two countries following border skirmishes.
To underline its displeasure, Rangoon is denying entry visas to Thai officials. The border is sealed except for Thai gamblers visiting the casinos.
Thai business bears the brunt of the sudden closure. Border trade and the tourism business suffer badly with millions of baht lost each day the crossings stay closed.
Ordinary folk on both sides of the border have to live with more insecurity; prices go up for essential commodities such as fuel and cooking oil.
In February last year, the Tachilek-Mae Sai border checkpoint was closed for several months after an artillery duel between the two countries.
Rangoon's military junta, accustomed to the privations of its own people, has a high pain threshold. It uses the border closure as a means of squeezing the Thais.
Burma has accused the Thais of giving the anti-government Shan rebels sanctuary and helping them when they attacked its military outposts last week.
The Thais, in turn, accuse Rangoon of doing nothing to stop the Wa, another ethnic group, from flooding Thailand with drugs.
The dispute shows the brittle quality of Thai-Burmese relations, and that membership in the Asean fraternity does not prevent armed conflict.
For now, the border problems can be contained because the Bangkok government is eager to make peace with Rangoon.
Much is at stake for Mr Thaksin. One of his key policies is to expand Thailand's economic relations with Burma.
But the border tension has set back the talks to develop key industries such as fisheries. Also in jeopardy are Thai plans to finance a crop-substitution project to replace poppy-growing in a Wa-controlled area near Thailand's Chiang Rai province.
Mr Thaksin is caught in a dilemma. His business diplomacy gets stalled each time he presses on with his other policy of staunching the drug flow across the Thai border.
Thailand's generals are raring to attack the Wa strongholds and wipe out drug factories at the Thai-Burmese border.
Some of them are unhappy with Mr Thaksin's appeasement policy 'at the expense of national security'. But while the generals snap and strain at the leash, they heed the orders of the civilian leadership.
Their restraint marks the progress in Thailand's democratic evolution. It reinforces the supremacy of civilian government in what was once a land of military coups.
Mr Thaksin's business-first approach was supposed to mark a sharp break with the previous Democrat government's policy of castigating Rangoon's human-rights lapses.
Following Mr Thaksin's fence-mending visit to Rangoon, Burma's military intelligence chief Lieutenant-General Khin Nyunt visited Bangkok last September.
In his 32-member delegation were top officials from the interior, tourism, fisheries, immigration, trade, foreign and health ministries. It was the clearest sign that the junta was prepared to play ball.
The mission was followed up in January, when leaders from both countries pledged to promote friendly ties and economic cooperation at a trade fair at Tachilek, scene of the armed clashes last year.
And in April, Burma's army chief and second-in-command in the junta General Maung Aye visited Thailand to step up bilateral cooperation.
But things have gone awry with the recent fighting at the border.
Both armies have thus far exercised restraint. Mr Thaksin calls the latest tiff 'a misunderstanding', but this belies the deep distrust on both sides.
The Thai army was conducting an exercise at its northern frontier with 30,000 troops, tanks and armoured personnel carriers to test its war readiness and ability to cope with border threats and drugs, when Mr Thaksin ordered them back to barracks to ease tensions with Burma.
To Rangoon, Thailand's military manoeuvre is a show of bad faith, if not provocative.
Burma's military spokesman said Thailand was 'breeding foreign terrorist organisations on its own territory'.
He accused the Thai army of firing artillery shells across the border to provide cover for the Shan insurgents when they attacked Burmese troops.
Rangoon, which spends a third of its budget on the military, is buying Russian MIGs after a Thai F-16 fighter jet fired two rockets near the Burmese town of Mong Yawn, a Wa stronghold, last year.
Some Thai generals and politicians are spoiling for a fight to wipe out the Wa, whom they say are producing much of the world's supply of heroin and methamphetamines.
Thai officials estimate that 800 million methamphetamine pills will be smuggled across the border from Burma into Thailand this year.
Thai MP and vice-chairman of the Parliament's Foreign Affairs Committee Kobsak Chutikul has suggested that the United States launch surgical air strikes against the 20,000-strong United Wa State Army.
Thailand wants Rangoon to rein in the Wa, if not relocate them deeper into Burma territory. This is no easy task.
The Wa, well-armed and self-sustaining with money from the narcotics trade, have been given virtual autonomy in Shan state at the Burmese border.
Rangoon's military government, which has fought an insurgency with its ethnic minorities for five decades, is unwilling to unravel a 1989 ceasefire it signed with the Wa drug barons.
Given the historical enmity between Thailand and Burma, the intractable problems of drugs, insurgency, refugees, illegal workers and border demarcation, it is a herculean task improving relations between the two.
Mr Thaksin will have his hands full trying.