Thailand and Cambodia have signaled their readiness to negotiate a ceasefire after mediation by U.S. President Donald Trump.

SISAKET, Thailand/PHNOM PENH July 27 (Reuters) - Thailand and Cambodia have agreed to Malaysia acting as a mediator in their border conflict, the Malaysian Foreign Minister said on Sunday, as the combatants each said the other had launched further artillery attacks across contested areas.

Thailand has mobilised gunboats to patrol its province bordering Cambodia as conflict between the two nations enters the third day, with death toll climbing to 33 and tens of thousands seeking refuge.

President Trump said on Saturday that both countries had agreed to a halt in the fighting. But on Sunday morning, skirmishes erupted once more.

Thailand and Cambodia may hold talks as soon as Sunday to bring an end to their deadly border clashes after US President Donald Trump warned Washington wouldn’t make a trade deal with either country while the conflict continued.

The tank screeches as it rolls into the ad-hoc military base before four battle-weary soldiers jump out to re-inspect the hefty vehicle.

Thailand has agreed in principle to a ceasefire with Cambodia amidst escalating conflict that has resulted in at least 33 deaths and 150,000 displaced. US President Trump has urged a ceasefire while negotiating trade agreements with both nations.

Thailand warned its conflict with neighboring Cambodia could “potentially develop into a war” as troops used rockets and artillery to shell targets along their contested border for a second

While Cambodia had earlier backed Malaysian-mediated ceasefire negotiations, Thai foreign ministry spokesperson Nikorndej Balankura had insisted that the two nations did not "need any mediation from a third country yet".

Thailand and Cambodia traded accusations Saturday of fresh attacks as deadly border clashes entered a third day, leaving at least 33 people dead and more than 168,000 displaced, as international pressure mounted on both sides to reach a ceasefire.

President Donald Trump said he called the leaders of Thailand and Cambodia to urge them to stop the fighting that erupted earlier this week, warning he wouldn’t make a trade deal with either country while the conflict continued.

Evacuation centers in Thailand near the Cambodian border continue to house masses of civilians who have fled the armed conflict. The fighting, now in its fourth day, has killed at least 33 people and displaced more than 168,