The fighting broke out after the seven men, who were travelling through the mountainous region by foot, refused to stop for a search, according to the military officer who requested anonymity.
"The seven dead men, who we suspect were from the Wa tribe, were trafficking drugs to nearby Chiang Rai province," he told AFP, adding the shoot-out took place around 1:00 am (1800 GMT yesterday) close to the border with Myanmar.
But some Wa communities have also settled in northern Thailand, which forms part of the notorious Golden Triangle -- a drug-producing zone where the two countries meet Laos.
The Thai rangers seized 554,000 methamphetamine tablets, approximately 30 kilogrammes (66 pounds) of heroine and an AK-47 from the men after the gunfight, according to the officer.
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Senior Thai Junta figures have unexpectedly admitted that the country's tough approach has failed to stem the scourge of drug addiction and have floated decriminalisation of meth as a solution.
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