A Myanmar rebel group has withdrawn its troops from a town along the Thai border following a counteroffensive by soldiers of the ruling junta from whom the resistance fighters had wrested the key trading post this month, an official said on Wednesday.

The Karen National Union (KNU) made a “temporary retreat” from the town of Myawaddy, a spokesperson said, after the return of junta soldiers to the vital strategic area that is a conduit for annual foreign trade of more than $1 billion.

“KNLA troops will ... destroy the junta troops and their back-up troops who marched to Myawaddy,” said Saw Taw Nee, referring to the group’s armed wing, the Karen National Liberation Army, one of Myanmar’s oldest ethnic fighting forces.

However, he did not say what its next move would be.

Fighting had flared as recently as Saturday in Myawaddy, forcing 3,000 civilians to flee in a single day as rebels fought to flush out stranded Myanmar government troops holed up at a border bridge crossing.

On Wednesday, Thailand said the fighting had eased and it hoped to re-open its border crossing as trade had been hit. It said most civilians had returned and 650 remained.