Cambodian Major General Srey Deok and Thai Colonel Chayan Huaysoongnern ordered troops not to fire their weapons again and had their captains shake hands on the frontline of their standoff near the ancient Preah Vihear temple.
"Let's tell our soldiers to sit down and talk together. We (commanders) have good feeling, but our soldiers have not yet felt good," Srey Deok said as the commanders sat surrounded by their troops.
"Everyone is still on alert, so I am afraid another problem could occur," he added.
The two sides agreed that low-level officers should now meet regularly to reduce tensions between the forces after two Cambodian soldiers were killed and several men from both sides injured after shooting broke out on Wednesday.
The two commanders also agreed to fill in bunkers dug in the area, building on an earlier agreement to begin joint border patrols. No timetable has yet been set for either action.
Laughing and joking together after the meeting, Chayan and Srey Deok ate lunch at a pagoda in the disputed territory.
Thailand's prime minister, under pressure from military chiefs to resign, on Saturday flew to the Cambodian border to visit soldiers injured in deadly clashes between the two nations.
Somchai Wongsawat was due to visit a military hospital in eastern Ubon Ratchathani province, where one soldier remains critically ill following a gunfight with Cambodian troops on their disputed border on Wednesday.
The current standoff first flared in July after Preah Vihear was awarded UNESCO world heritage status, angering Thai nationalists who claim ownership of the site.
The situation quickly escalated into a military confrontation, with up to 1,000 Cambodian and Thai troops facing off for six weeks, although both sides in August agreed to reduce troop numbers in the main disputed area.
The Cambodian-Thai border has never been fully demarcated, in part because it is littered with landmines left over from decades of war in Cambodia.
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