The temple stands atop mountains on the Thai-Cambodian border
Thailand has denied claims by Cambodia that its troops violated Cambodian territory in a disputed border area near an ancient Hindu temple.
Cambodia says about 40 Thai soldiers crossed the frontier following the arrest of three Thai protestors near the site by Cambodian authorities.
The head of the national authority for the Preah Vihear temple said there was a stand-off, but had been no shooting.
Thai military officials said troops had been deployed in Thai territory nearby.
"We have every right to deploy troops here to protect our sovereignty," Maj-Gen Kanok Netakawesana, the regional Thai army commander, told the Associated Press.
Earlier, three Thai protesters were arrested for illegally crossing the border in an attempt to plant a Thai flag at the site. They were released hours later.
Hang Soth, the head of the Cambodian agency in charge of the temple site, said the Thai soldiers had positioned themselves at a Buddhist pagoda located on a mountain slope below and were now negotiating with the Cambodian authorities.
"At first about 20 troops entered a pagoda in Cambodian territory," he told the AFP news agency.
"Later they increased their numbers to about 40," he said. "We don't understand yet why they came."
Hang Soth said that Cambodian troops in the area had been placed on alert but ordered not to open fire first, and that there had not been any shooting.
The governor of the neighbouring Thai province of Si Sa Ket, Seni Chittakasem, insisted there had been a misunderstanding.
"There is no trespassing by our soldiers," he said.
The 11th Century Hindu temple and the land around it have been the subject of a border dispute for decades.
The Preah Vihear temple was awarded to Cambodia by the International Court of Justice in 1962, forcing Thai troops who had occupied the area to withdraw.
It then became caught up in Cambodia's civil conflict, falling to the Khmer Rouge in 1975 and only being opened to the public in 1998.
Tension between the two countries has increased since Cambodia applied for World Heritage status for the temple, which was approved by Unesco earlier this month.
The application was endorsed by Thai Foreign Minister Noppadon Pattama, but this caused controversy in Thailand and he resigned last week after a court ruled he had breached the constitution.