The dead were among several armed men trying to cross into Thailand on the weekend, according to a report by the Mizzima news agency. The suspected smugglers opened fire on Thai forces, and the two men were shot during a gun battle lasting just over 10 minutes, the report said.
The other gunmen fled back into Myanmar, said New Delhi-based Mizzima, an agency of pro democracy Myanmar journalists living in exile.
Officials said they believe the dead are soldiers of the United Wa State Army, a widely suspected narcotics growing and trafficking group. The UWSA includes members of the Wa ethnic group that previously supported the military when it took control of Burma in a 1962 coup. But since the early to mid 1980s the Wa and other guerrilla fighters have retreated to the northern part of Shan state.
However, the military rulers who renamed Burma as Myanmar in 1989 have over the years signed uneasy truces with the insurgents, in particular with the UWSA, whose fighters are thought to number around 20,000.
In Myanmar's 2008 constitution certain UWSA-controlled areas were given the status of an autonomous region. Analysts believe the UWSA operations are covertly sanctioned by corrupt sections of the Myanmar military, although the Myanmar generals continually deny these allegations.
A report in the Bangkok Post earlier in the week said another fatal gun battle near the Myanmar border netted 142,000 methamphetamine pills, a gun and a hand grenade. Two smugglers were also killed and three villagers, members of the Hmong tribe, were arrested on charges of possessing illegal drugs -- 12,000 yaba pills hidden under the saddles of three motorbikes.
Yaba is a methamphetamine and caffeine pill that tastes like candy and is a favorite of young people, especially at rave parties. It has also been called Nazi speed because of its creation by German scientists during World War II to boost the endurance of soldiers.
Thai Deputy Prime Minister Suthep Teuksuban said last week that military surveillance along the Myanmar border is to be increased because of more fighting between the Myanmar military and armed ethnic groups involved in smuggling. Thai authorities expect more armed groups may attempt to enter Thailand to sell drugs in order to buy weapons.
The border incidents come just before a widely expected fact-finding visit to Myanmar this week by U.S. Assistant Secretary of State for East Asia Kurt Campbell and Scot Marciel, U.S. ambassador to the Association of Southeast Asian Nations regional organization.
The visit is part of President Barack Obama's pursuit of engagement with Myanmar's military rulers, although Campbell has said dialogue will not replace sanctions, but simply supplement them.