"I ask the public not to be alarmed. Malaysian authorities have voiced their opposition to it [the flag raising]," Gen Prayuth said. "We're tracking down those behind these acts."
When asked about Prime Minister Yingluck Shinawatra's trip to Narathiwat to meet local state officials and religious leaders on Wednesday, he said the visit boded well for the far South.
"We need cooperation from all sides, not just the army. We might not be able to deal with all of the bomb attacks in the area if we cannot carry out full military operations there," the army chief said.
National Intelligence Agency director Suwaphan Tanyuwattana said he he did not believe the southern insurgents received financial backing from Islamist Taliban militants.
"The Taliban and other terrorist groups have no involvement in providing financial support to ponoh schools in the three southern border provinces [Narathiwat, Pattani and Yala] even though the Anti-Money Laundering Office (Amlo) has frozen assets belonging to the owner of the Islam Burapa ponoh school in Narathiwat," Mr Suwaphan said.
In July 2007, authorities arrested students from Islam Burapa ponoh school after they were found to be involved with the insurgent movement. Weapons were also discovered in the school grounds.
Amlo investigators later uncovered irregular financial transactions involving the school's owner, board members and the chairman of a foundation that runs the school.
However, there was no evidence indicating that the money was transferred to the school from abroad.
In Narathiwat on Thursday morning, a woman lost her leg when a bomb exploded at a rubber plantation on Rangae-Cho Ai Rong road in Rangae district.
Police said Chaleo Rattanapong, 45, and his wife Jiraporn, 41, were tapping rubber when she stepped on a bomb planted at the foot of a rubber tree.
The bomb explosion seriously injured Mrs Jiraporn, whose left leg was almost amputated. She was rushed to Narathiwat Ratchanakarin Hospital.
Her husband, who was about eight metres away, was not hurt.
More than 5,000 people have been killed and over 9,000 hurt in more than 11,000 incidents, or about 3.5 a day, in the three southernmost provinces and the four districts of Songkhla since the violence erupted afresh in January 2004, according to Deep South Watch - an independent research group that monitors the southern unrest.