Mr Chalerm yesterday called for a special form of government for Yala, Pattani, and Narathiwat.
The governors of the three southern provinces would be elected and have some degree of autonomy - like the Bangkok Metropolitan Administration and Pattaya City - but would still come under the control of central government.
Mr Chalerm said this new form of government would not lead to secession in the southern region.
He said he would have to discuss the idea with Pheu Thai Party members and MPs before putting it to Prime Minister Yingluck Shinawatra.
Pattani provincial police chief Phichet Pitisettthaphan voiced support for the idea. He suggested provincial police chiefs and military unit commanders also come under the administration.
However, Deputy Prime Minister Yutthasak Sasiprapa, who oversees national security, is less keen on the election of the governors.He said he prefers the existing system, that the governors in the five southern-most provinces be allowed to select their district chiefs who would also be agreed upon by the Southern Border Provinces Administration Centre.
Artef Sokho, coordinator of the Pattani-based Youth for Peace and Development Academy, said electing the governors was a good idea but would not end the violence.
"The government does not deal with the core issue of negotiations or talks. It's time the negotiations were in the open and understood and welcomed across society," he said.
"Security officials say they don't know who to talk to while the insurgents are not sure if the people they talk to can deliver anything," said Mr Artef.
Intelligence sources in Pattani said the governor proposal would simply increase the desire among certain politicians for power.
"The grass roots do not really care about elections. Let see whether those involved in the insurgency would be voted in as a governor," a source said.
Abdul Aziz Tade-in, an adviser to the Young Muslim Association of Thailand, said the idea was interesting and worth considering but more details on the proposal are needed, especially on the scope of authority of the elected governor.
Gen Yutthasak also talked about reports of large-scale land buying in the deep South believed to be financed from overseas. He said 39 deals had been struck to buy 2,600 rai in the three southern provinces, with Pattani accounting for the most land plots sold.
He believed the land buying was intended to expel local people or to launder money acquired by drug gangs.
Her Majesty the Queen has raised concerns over reported land grabbing in the restive region.
Gen Yutthasak said he had raised the issue with army chief Prayuth Chan-ocha who has advised the prime minister on the matter. He said the government will allocate a budget of about 1.2 billion baht for land mortgages for residents or to buy their plots to ensure they do not fall into the wrong hands.
He said the Anti-Money Laundering Office is monitoring suspicious financial movements in bank accounts of people believed to be linked to the land buying.
Meanwhile, Suhaimee Makae, the toh imam of Khao Tanyong mosque in Narathiwat's Muang district, said it was impossible for foreign countries to invest such huge amounts of money to buy land in Thailand because there are legal limits on land ownership.
Col Pramote Prom-in, deputy spokesman of the southern Internal Security Operations Command, said army personnel had been sent to survey land plots in the three southern provinces and found no suspicious mass buying.