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The International Court of Justice interpreted a 1962 ruling saying that "Cambodia had sovereignty over the whole territory of the promontory of Preah Vihear," Judge Peter Tomka said.
"In consequence Thailand was under an obligation to withdraw from that territory Thai military or police forces or other guards or keepers who were stationed there," Tomka said.
At least 28 people have been killed in outbreaks of violence since 2011 over the ownership of the patch of border land next to the 900-year-old Preah Vihear temple.
"It's good enough," Cambodian Foreign Minister Hor Namhong, who was at the hearing in The Hague, told reporters after the ruling which nevertheless excluded Cambodian sovereignty over some land, including a place known as Phnom Trap.
"This is a very long decision by the court that we need to study very carefully," he said. "The two countries need to negotiate between themselves."
"Both sides are satisfied with the verdict," said Thai Foreign Minister Surapong Tovichakchaikul, adding that Bangkok and Phnom Penh would discuss further steps in a joint commission.
There were reportedly no celebrations on the streets of Phnom Penh after the verdict, while a demonstrator set fire to a Cambodian flag on a Bangkok street, AFP correspondents reported.
Last year, the ICJ ruled that both countries should withdraw forces from around the ancient Khmer temple, which is perched on a clifftop in Cambodia but is more easily accessed from the Thai side.
Cambodia and Thailand finally pulled hundreds of soldiers from the disputed zone in July 2012, replacing them with police and security guards.
Last place to fall to Khmer Rouge
Tens of thousands of people were displaced in the 2011 fighting, leading Cambodia to ask the ICJ for an interpretation of an original 1962 ruling.
Thailand does not dispute Cambodia's ownership of the temple, a UNESCO World Heritage site, but both sides laid claim to an adjacent 4.6-square-kilometre (1.8-square-mile) piece of land.
Access from the Cambodian side was so difficult that in the 1970s it was the last place to fall to the Khmer Rouge regime, and also the communists' last holdout in the 1990s.
Leaders of the two countries appealed for calm before the ruling by 17 international judges which cannot be appealed.
The Cambodian government will try to "avoid to be dragged into confrontation with Thai extremists and increase cooperation and exchange of information between the armies of the two countries at the border," spokesman Khieu Kanharith told AFP.
"At this time the situation is calm. The cooperation between the troops along the border is good and friendly," he said.
The Cambodian army meanwhile denied local media reports that it had sent military reinforcements to the area.
On her Facebook page Thai Prime Minister Yingluck Shinawatra vowed Sunday to "consult" with Cambodia after the decision to avoid any conflict, adding her government would make a statement following the verdict.
The ruling, which was broadcast live on Thai television, is fraught with danger for her government, which is already grappling with mass street demonstrations against a controversial political amnesty bill.
The country's opposition is now likely to direct public anger towards Yingluck, whose divisive brother Thaksin is close to Cambodia's strongman premier Hun Sen.
Cambodia has allowed Thaksin -- who lives in self-imposed exile to avoid a jail term for corruption -- to hold a number of rallies for his "Red Shirt" supporters on its soil.
There are fears a negative verdict for Thailand will increase anger among hardline nationalists.
In a television appeal last week Hun Sen urged his armed forces to "remain calm and show restraint", adding he had agreed with his Thai counterpart to abide by the ICJ's decision.
The roots of the dispute lie in maps drawn up in 1907 during French colonial rule. -Channel News Asia
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