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 day.

The Thai warning came as the U.S. expressed its grave concern about the most serious fighting in years between the Southeast Asian neighbors. The U.S. and China compete for influence in fast-growing Southeast Asia, and both have good relations with Thailand and Cambodia.

In Thailand, clashes in the Ubon Ratchathani and Surin provinces wounded dozens and displaced more than 100,000 civilians. Some 1,500 families in Cambodia's Oddar Meanchey province have been evacuated.