The Pha Muang Task Force and Thai Army Rangers were on patrol duty to inspect drug smuggling in Mae Salong Nai sub-district, Mae Fah Luang district of Chiang Rai, and encountered the caravan of drug dealers believed to be the network of Col Yi Say, a drug kingpin wanted by Thai authorities.
The clash with 8 to 10-strong armed group occurred on Friday night after authorities have asked the group to stop for a search.
The authorities said that they had intensified the patrol after a tip-off that the drug dealers would smuggle the illicit drugs from the border into the city during Songkran festival.
The gunfight lasted for 30 minutes and authorities recovered seven bodies of the suspected drug smugglers, while all soldiers were reported safe.
Six backpacks were seized containing 700,000 methamphetamine pills and a hand grenade.
Meanwhile, Chiang Rai police arrested a drug dealer and confisticated 100,000 methamphetamine pills while he was on a Chiang Rai-Bangkok inter-provincial bus.
The suspect was identified as Mr Suriyan Wuyue, 20, a resident of Chiang Mai's Mae Ai district.
Police found the illicit drug hidden in his luggage after the bus was searched at a checkpoint.
Mr Surayan told police that he was hired by a man name Lek to deliver the drug to a gas station on the road along Ramintra-Artnarong Expressway in Bangkok.