"People should understand that there won't be any large-scale war taking place," he told reporters after a weekly cabinet meeting, adding people living near the border need not worry.
Both sides have sought to ease tensions since three Cambodian soldiers were killed in Wednesday's 40-minute firefight along the disputed stretch of border near the temple.
Seven Thai soldiers and two Cambodians were also wounded in the most serious border clash in years.
Thai and Cambodian army commanders agreed on Thursday to conduct joint patrols of the disputed border, but they failed to reach a deal on reducing their forces around the temple.
"Yesterday's negotiation was very good, although we did not achieve the goal we wanted. The situation at the border is good in general," Hun Sen said.
He denied Thai allegations that Cambodian soldiers had planted new mines along the border, already one of the world's most heavily-mined frontiers after decades of civil war, including years of occupation by Pol Pot's Khmer Rouge.
Hun Sen said there was no need for outsiders, such as the United Nations or the Association of South East Asian Nations, to get involved in the dispute.
Some analysts link the eruption of fighting on the border to the political instability that has roiled
Thai Prime Minister Somchai Wongsawat called an unscheduled meeting of his coalition partners on Friday amid intensifying speculation he would call a snap election after the head of the army said he should step down.
"I somehow doubt that the Thai action is more than a reflection of the intense nationalism which the army feels they must demonstrate to keep the population on their side," said Derek Tonkin, a former British ambassador to
The hilltop Preah Vihear temple has stirred nationalist passions in both countries for generations.
The International Court of Justice awarded it to Cambodia in 1962, a ruling that has rankled Thais ever since, but it failed to determine the ownership of 1.8 square miles (4.6 sq km) of scrub next to the Hindu ruins.
Earlier in the cabinet meeting, Hun Sen called for an increase in military spending, the first since the collapse of the Khmer Rouge in 1998.
He also called for a minute's silence at the start of the cabinet meeting for the Cambodian soldiers killed this week.
"They sacrificed their lives to defend our nation in response to a foreign invasion," he said.