The two sides are engaged in a naval stand-off
A three-member Bangladeshi team is in Burma to hold talks on a territorial dispute between the two nations in the Bay of Bengal.
The two countries have deployed naval vessels following Burmese attempts to explore for gas in a disputed stretch of the sea.
Bangladesh insists that the area lies well within its waters and has already formally protested over the issue.
But a senior Burmese official said the exploration was inside their territory.
"We will try to solve this peacefully, but we are also ready to protect our country if needed... we will not tolerate being insulted, although we do want good will. We will continue with exploration," a senior official from the Burmese military government told AFP news agency.
The war of words has escalated with senior Bangladeshi officials warning of possible military action, if Burma continued with its exploration work.
"Our intention has always been peaceful. But we have to let them know that Bangladesh will defend her territorial sovereignty in every way possible," the Bangladesh foreign minister, Iftekhar Ahmed Chowdhury said.
According to Bangladeshi sources, the dispute is taking place about 50 nautical miles south-west of an island called St Martin's.
It has protested to Burma over "an incursion" by Burmese vessels over the weekend.
There were reportedly four exploration ships escorted by two Burmese naval craft.
Bangladesh has demanded that the Burmese withdraw until the maritime boundary can be agreed through negotiations. It has already put its navy on high alert.
The Bangladeshi team is expected to travel to the new capital Naypyidaw on Thursday to hold talks with senior Burmese officials.
The two countries held a series of meetings in the past year aimed at resolving the dispute over their maritime boundary but without much success.
Experts believe that the Bay of Bengal may prove to be rich in natural resources, and both poverty-stricken nations will be very keen to hold on to as much of it as they possibly can.