BANGKOK (Reuters) – The Thai government dismissed proposed peace talks on Tuesday to end a nine-week crisis that has killed 67 people and threatened to tear the country apart, calling on thousands of anti-government protesters to disperse.

As the prospects for official talks unraveled, fighting erupted again in the Din Daeng district north of a Bangkok shopping area occupied by about 5,000 protesters whose leaders say they are willing to fight to the death to topple Prime Minister Abhisit Vejjajiva.

BANGKOK (Reuters) – Five days of chaotic street fighting. A rising death toll. Unrest spreading to rural heartlands. A prime minister who won’t back down. Protesters willing to fight to the death.

Thailand’s political crisis has lurched from festive anti-government rallies in March to violent gun fights in April to full-scale urban warfare in May, but experts say the worst may be yet to come as thousands of troops struggle to restore order.

BANGKOK, May 16 (Reuters) – Thailand took a tough stand against thousands of anti-government protesters on Sunday, rejecting demands for U.N.-supervised talks and calling on their leaders to surrender after deadly clashes with troops.

Hardline comments from the Thai government doused hopes of a compromise to end three days of chaotic fighting that has killed at least 29 people, all civilians, and wounded 221, trapping residents in homes and raising the risk of a broader conflict.

Nattawut Saikai, a protest leader, called for a ceasefire and U.N. moderated talks. "We have no other condition. We do not want any more losses," he told supporters.

But the government swiftly dismissed the offer. "If they really want to talk, they should not set conditions like asking us to withdraw troops," said Korbsak Sabhavasu, the prime minister’s secretary-general.

As fighting raged in two areas of the city of 15 million people, residents hoarded food at supermarkets, stayed indoors or fled to escape neighbourhoods transformed into battlegrounds.

"Rejection of any ceasefire talk is very ominous," said political scientist Vienrat Nethito at Chulalongkorn University. "This pretty much guarantees fighting will continue and the city will be even closer to the brink of civil war."

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The most severe fighting took place in the Bon Kai area of Rama IV, a major artery to the business district. Troops and snipers fired semi-automatic weapons as protesters hurled petrol bombs and burned walls of kerosene-soaked tyres to camoflauge themselves.

One protester was shot in the head by a sniper, a Reuters witness said. By afternoon, as clashes intensified, a grenade was tossed at troops, who responded with gunfire, the witness said.

Some wounded protesters were taken to hospital on the back of motorcycles, witnesses said, as medical rescue workers were either blocked by the military or too scared to enter the scene of clashes after two medical workers were killed in the clashes.

Government spokesman Panitan Wattanayagorn called on protest leaders to surrender and end the protest immediately. "We will move forward. We cannot retreat now," Prime Minister Abhisit Vejjajiva said in a televised statement, encapsulating the government’s mood.

PUBLIC HOLIDAY

Monday and Tuesday were declared public holidays, but banks and financial markets would remain open.

Analysts and diplomats said the military appears to have underestimated the resolve of thousands of protesters barricaded in district of luxury hotels and shopping malls for six weeks.

Some women, children and the elderly are trickling into a nearby Buddhist temple for safety. The government is seeking cooperation with protest leaders to dispatch Red Cross workers and other human rights volunteers to persuade people to leave.

"We will not flee," Jatuporn Prompan, a protest leader, told supporters in their 3.5 sq-km (1.2 sq-mile) main protest site where at least 5,000 remain, including women and children, are barricaded behind walls of tyres, poles and concrete.

Abhisit briefly threatened to impose a curfew, a rare and jarring event for a city known for raucus nightlife, saying it could help isolate the area.

The mostly rural and urban poor protesters, supporters of ousted premier Thaksin Shinawatra, accuse the military-backed government of colluding with the royalist elite and meddling with the judiciary to bring down previous Thaksin-allied governments.

The government declared a state of emergency in five more provinces as fighting showed signs of spreading to the north and northeast, a Thaksin stronghold home to just over half of Thailand’s 67 million people.

In Ubon Ratchathani province, protesters burned tyres on several roads. One group tried to break into a military compound but were forced back by warning shots into the air. Emergency decrees are now imposed in 22 provinces.

Thousands of protesters were massing in a separate area in working-class Klong Toey area near the fighting on Rama IV. A new protest site would vastly complicate attempts to end the protests and resolve a crisis that has battered the economy.

Five journalists have been shot, though one escaped unwounded because the bullet deflected off his flak jacket.

ONE-SIDED BATTLE

As Bangkok braced for more unrest, many residents hoarded food and other supplies from grocery stores.

"We don’t know how much longer this nightmare is going to last and how far it will spread," said Panna Srisuwan, a Bangkok resident waiting in line at a supermarket. "I am stocking up for the rest of the week."

Witnesses said the bloodshed has been largely one-sided, as troops armed with automatic rifles easily dodge projectiles and open fire with automatic weapons. Some protesters have been killed by snipers positioned on the tops of office towers.

Soldiers can shoot if protesters come within 36 metres (120 ft) of army lines, said army spokesman Sansern Kaewkamnerd, adding more soldiers were needed to establish control.

The government insists that some of the protesters are armed with grenades and guns and showed footage on national television in an attempt to bolster their case.

Many protest leaders now face terrorism charges that carry a maximum penalty of death, raising the stakes in a two-month crisis that has paralysed parts of Bangkok, stifled Southeast Asia’s second-biggest economy and decimated tourism.

The government’s strategy of starving protesters out of their encampment was shows signs of having an effect. Supplies of food, water and fuel were starting to run thin as the red shirt delivery trucks were being blocked.

But they said they still had enough to hold out for days.

Before fighting began on Thursday with the shooting of a renegade general allied with the protesters, the two-month crisis had already killed 29 people and wounded about 1,400 — most of whom died during an April 10 gun battle in Bangkok’s old quarter. (Additional reporting by Ploy Ten Kate, Damir Sagolj, Jerry Lampen, Panarat Thepgumpanat and Martin Petty; editing by Bill Tarrant)

BANGKOK (Reuters) – Thousands of Thai protesters refused to leave Bangkok’s streets on Sunday despite three days of fighting that has killed 24 people and spiraled into chaotic urban warfare, with both sides calling for reinforcements.

Prime Minister Abhisit Vejjajiva vowed on Saturday to stop mostly rural and urban poor protesters from toppling his government, which is backed by Thailand’s royalist elite, a group the protesters accuse of subverting democracy.

BANGKOK (Reuters) – Thai troops fired at protesters on Saturday in a third day of fighting on Bangkok’s streets that has killed 16 people as soldiers struggle to isolate a sprawling encampment of demonstrators seeking to topple the government.

Clashes continued across central Bangkok as soldiers behind sand bags or atop buildings fired live rounds at protesters armed with petrol bombs. One was shot in the chest while trying to ignite a tyre in Bangkok’s usually bustling business district.

BANGKOK, May 15 (Reuters) – Thailand’s capital was tense on Saturday after a night of fighting that killed 16 people and wounded 141 as troops struggle to isolate a sprawling encampment of protesters seeking to topple the government.

Thundering grenade explosions and sporadic gunfire echoed across central Bangkok until nearly dawn as the army battled to set up a perimeter around a 3.5 sq-km (1.2 sq-mile) protest site defiant red-shirted demonstrators refuse to leave.

The U.N. Secretary-General Ban Ki-Moon expressed concern over "the rapidly mounting tensions and violence".

"He strongly encourages them to urgently return to dialogue in order to de-escalate the situation and resolve matters peacefully," his spokesman said in a written statement.

The Canadian government urged a return to talks following the violence after a Bangkok-based Canadian journalist was shot three times, one of three journalists wounded in fighting on Friday that spiralled into chaotic urban warfare.

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The government said on Friday it would restore order "in the next few days" as the city of 15 million people braced for a crackdown to end a six-week protest by thousands of "red shirts" packed into an area of high-end department stores, luxury hotels, embassies and expensive residential apartments.

The crisis has paralysed parts of Bangkok, squeezed Southeast Asia’s second-biggest economy and scared off tourists.

Troops fired tear gas, rubber bullets and live rounds at defiant protesters who fought back with petrol bombs, stones and home-made rockets. They set vehicles on fire and rolled burning tyres into checkpoints of troops.

The army said the protesters were firing handguns and M-79 grenades. Army spokesmen Sansern Kaewkamnerd said there were an estimated 500 armed "terrorists" among the thousands of protesters in the city.

A source close to army chief Anupong Paochinda said more troop reinforcements would be deployed, fearing more protesters would arrive to surround and attack soldiers.

"It’s unlikely to end quickly. There will be several skirmishes in the coming days but we are still confident we will get the numbers down and seal the area," the source said.

PROTESTERS REMAIN DEFIANT

The protesters are showing no sign of leaving. The number of casualties is expected to keep rising, deepening a crisis that began with festive rallies on March 12 and descended into Thailand’s deadlist political violence in 18 years.

Before fighting began on Thursday with the shooting of a renegade general allied with the protesters, the two-month crisis had already killed 29 people and wounded about 1,400 — most of whom died during an April 10 gun battle in Bangkok’s old quarter.

The protesters are barricaded behind walls of kerosene-soaked tyres, sharpened bamboo staves, concrete blocks and razor wire.

The fighting is the latest flare-up in a polarising five-year crisis between a royalist urban elite establishment, who back Prime Minister Abhisit Vejjajiva, and the rural and urban poor who accuse conservative elites and the military’s top brass of colluding to bring down two elected governments.

Those governments were led or backed by exiled former premier Thaksin Shinawatra, a graft-convicted populist billionaire ousted in a 2006 coup who is a figurehead of the protest movement.

The red shirts and their supporters say the politically powerful military influenced a 2008 parliamentary vote, which took place after a pro-Thaksin party was dissolved, to ensure the British-born, Oxford-educated Abhisit rose to power.

They have repeated their demand for Abhisit to call an immediate election and say he should take responsibility for violence that is also rattling investors.

Five-year Thai credit default swaps, used to hedge against debt default, widened by more than 30 basis points on Friday — the biggest jump in 15 months — to 142 basis points.

"With gun battles and grenades going off, investors will look elsewhere," said Danny Richards, an analyst at the Economist Intelligence Unit.

"I don’t think many see the end of this protest as the end of the crisis. When there’s an election, either side will reject the legitimacy of the other and we’ll be back to square one." (Additional reporting by Martin Petty and Ambika Ahuja; Editing by Jerry Norton)

BANGKOK, May 14 (Reuters) – Thai troops battled anti-government protesters in central Bangkok on Friday attempting to seal off their encampment after an assassination attempt on a renegade general unleashed a new wave of violence.

Troops fired repeatedly into an intersection leading to an encampment in a ritzy hotel and shopping district they have occupied for five weeks, a Reuters witness said, adding he saw several people injured including two journalists.

It was unclear if troops were using live rounds, rubber bullets or both, he said.

A Bangkok-based foreign journalist working for France 24 television station was wounded, the station said. A Thai photographer was also shot, a Reuters witness said.

Analysts said a possible split between a police force that has loyalties to ousted premier Thaksin Shinawatra and the military will make it more difficult to contain the violence.

Those fears were underlined after a Thai policeman fired bullets at soldiers during the clashes, a Reuters witness said.

Troops had yet to fully seal off all major roads leading to the "red shirt" encampment, raising questions over whether the government could soon end the protests.

At least one person was killed 11 people wounded in the violence since Thursday night, but that toll was expected to rise. Many hospitals declined to provide numbers of casualties.

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The cost of insuring Thai debt jumped the most in 15 months and Thai bond yields <TH5YT=RR> fell to a nine-month low on Friday as the wave of violence prompted investors to rush to the relative safety of government debt.

Five-year credit default swaps, used to hedge against debt default but also to speculate on country risk, jumped by more than 30 basis points to 142 basis points.

Stocks <.SETI> fell 1.2 percent. [ID:nTOE64D04D]

Protesters had formed their own checkpoint overnight at the famous Suan Lum night market to stop soldiers from sealing off roads around their main fortified encampment in Bangkok’s commercial heart. That became one of the main battlegrounds.

They set fire to a bus, motorbike and tyres as they retreated, and soldiers took control of an intersection leading to a road lined with hotels, the U.S. ambassador’s home and several embassies, which were closed and evacuated.

Troops fired rubber bullets into a nearby park after gunshots were heard, Thai television said.

Soldiers used tear gas and water cannon before dawn at the Nana intersection, packed with shops and racy go-go bars. Skirmishes flared in other parts of the city as the protesters remained defiant, vowing to fight to the death.

"They are tightening a noose on us but we will fight to the end, brothers and sisters," a protest leader, Nattawut Saikua, told a cheering crowd of about 10,000 at the main protest site.

SEALING OFF PROTEST SITE

The latest violence followed tough security measures imposed on Thursday evening to reclaim Bangkok’s commercial district after the collapse of a reconciliation plan proposed last week by Prime Minister Abhisit Vejjajiva.

Abhisit is under enormous pressure to end the protests, which began with festive rallies on March 12 and descended into violence that is stoking concerns over the outlook of Southeast Asia’s second-biggest economy.

The shooting and a security cordon marked the start of a violent crackdown in which the Thai government stands a good chance of clearing the streets, the Eurasia Group political risk consultancy said.

"But it will not end the polarisation that has led to the current instability — ensuring that the pressure from the red shirts will persist and that political volatility will remain a persistent problem for Thailand for the forseeable future".

It is unclear who shot a renegade general who has been in charge of security for thousands of protesters occupying a 3 sq-km (1.2 sq-mile) stretch of central Bangkok since April 3.

Khattiya Sawasdipol, a suspended army specialist better known as "Seh Daeng" (Commander Red), was shot in the head, apparently by a sniper, while talking to reporters on Thursday evening.

He underwent brain surgery and was in critical condition.

Khattiya had been branded a terrorist by the Thai government, which accused him of involvement in dozens of grenade attacks that have wounded more than 100 people.

But in recent days he was equally critical of other red shirt leaders, accusing them of embracing Abhisit’s proposed "national reconciliation" which unravelled after protesters refused to leave the streets.

Speculation was rife as to who might have tried to assassinate him with fingers pointing at the military, shadowy militants who have appeared in previous incidents of violence, and from the ranks of red shirts themselves.

His shooting sparked half a dozen confrontations overnight between rock-throwing protesters and armed security forces on the outskirts of the protesters’ barricaded encampment.

One protester was shot in the eye and died after a group of red shirts confronted soldiers armed with assault rifles next to a park in the Silom business district, witnesses said. Some protesters hurled rocks and troops fired in return.

Most businesses and embassies in the area have evacuated staff and were closed for the day. Apartment complexes were mostly empty after the government warned it would shut down power and water supplies, and landlords urged tenants to leave. (Additional reporting by Ploy Ten Kate, Chalathip Thirasoonthrakul and Damir Sagolj; Writing by Bill Tarrant; editing by Jason Szep)

BANGKOK (Reuters) – Thai troops fired tear gas and rubber bullets towards protesters on Friday following overnight fighting that killed one and wounded 11, including a rogue general, as a two-month political crisis deepened.

A foreign journalist was shot during the afternoon skirmishes, a Reuters witness said. No other details were immediately available.

BANGKOK (Reuters) – Violence flared in the Thai capital on Friday as troops confronted groups of protesters around a major commercial district following overnight fighting that killed one and wounded nine, including a rogue general.

At dawn, protesters and troops skirmished in the usually bustling business area near Lumpini Park and Sathorn Road. Soldiers were earlier seen using tear gas and water cannon at Nana intersection, packed with shops and racy go-go bars.

BANGKOK, May 13 (Reuters) – Thousands of Thai anti-government protesters were seeking reinforcements on Thursday after ignoring a midnight deadline to end two months of street rallies that have sparked Thailand’s deadliest political violence in 18 years.

Leaders of the mostly rural and urban poor protesters urged supporters to join their barricaded encampment in Bangkok’s commercial district after authorities abruptly postponed plans to cut power and water to the area following outcry from residents.

"We came as lions, we must go back as lions," Jatuporn Prompan, a protest leader, told cheering supporters late on Wednesday. "Please come out and help us man our forts."

Prime Minister Abhisit Vejjajiva Abhisit is under enormous pressure to end the five-week occupation of the shopping district by protesters who say he lacks a popular mandate after coming to power in a controversial parliamentary vote 17 months ago.

"With another day of another futile ultimatum and no fruitful action, Abhisit risks losing any credibility he has left," Nattaya Chetchotiros, assistant news editor at The Bangkok Post, wrote in a column.

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Abhisit’s threats follow the unravelling of a government peace plan proposed last week to end a political crisis that has killed 29 people, paralysed parts of Bangkok and slowed growth in Southeast Asia’s second-biggest economy.

Both sides appear to be running out of options, raising the risk of a violent confrontation and flummoxing investors in one of Southeast Asia’s most promising emerging markets.

"The markets have no idea what to make of the situation. It seems like we’re heading back to square one," said Sukit Udomsirikul, a senior analyst at brokerage Siam City Securities.

"It’s obvious it’s more difficult than they thought in terms of how to disperse the protesters," Sukit added. "A resolution to the crisis looks far off."

Foreign investors have turned negative since violence flared in April and have sold ($584 million) in Thai shares in the past six sessions, cutting their net buying so far this year to $607.6 million as of Wednesday.

FISSURES IN PROTEST MOVEMENT

Disparate views among protest leaders — from radical former communists to academics and aspiring lawmakers — make it difficult to reach consensus. Many face criminal charges for defying an emergency decree and some face terrorism charges carrying a maximum penalty of death.

Several harbour political ambitions and need to appease rank-and-file supporters. Others fear ending the protest now would be a one-way ticket to jail. Some hardliners advocate stepping up the protests to win the fight once and for all.

"Most people want this to end but they are sceptical because the government cannot guarantee our safety," Korbkaew Pikulthong, another protest leader, told Reuters. "The problem is some of us face severe charges and the government shows no inclination to be fair to us. A few want to fight on because we have come so far."

On Wednesday, Abhisit cancelled a proposal to hold elections on Nov. 14 under his "national reconciliation" plan and called off further talks with the protesters.

Despite its reversal of plans to cut off power and water to the area packed with hotels, embassies, businesses, high-end apartments and two public hospitals, authorities say they will start diverting some transportation from the district.

The red-shirted protesters, mostly supporters of former premier Thaksin Shinawatra who was ousted in a 2006 coup, have said they would only disperse if a deputy prime minister faces criminal charges over a deadly April clash between troops and protesters. (Additional reportiing by Ploy Ten Kate; Editing by Nick Macfie)