BANGKOK, April 19 (Reuters) - Thai soldiers patrolled Bangkok's business district on Monday to keep thousands of anti-government protesters from marching there, raising fears of fresh violence in the polarised country.
Red-shirted supporters of ousted Prime Minister Thaksin Shinawatra said they would march to Silom Road, a banking and office district in the Thai capital, from their main base in an upscale shopping area, in defiance of an emergency decree.
Troops, some armed with machine guns, stood behind barbed wire and metal barricades facing hundreds of protesters, who had stockpiled poles and clubs behind their lines.
Prime Minister Abhisit Vejjajiva made army chief General Anupong Paochinda head of national security on Friday, replacing a deputy prime minister, after admitting efforts to control a five-week protest aimed at forcing an early election had failed.
The military followed that with a marked shift to more aggressive rhetoric, saying the protest in the capital that has decimated the key tourism industry must end, and it was prepared to clash with demonstrators if it had to.
'I want to urge the red shirts not to use children and the elderly as their front line to put pressure on the security forces,' an army spokesman said after Anupong chaired a meeting on Monday with commanders involved in the crowd control. 'But the operations will start from soft to heavy measures.'
Adding to the combustible mix, rival 'yellow shirt' protesters threatened a massive rally if the government failed to act within seven days, putting the deeply-divided nation on a collision course not seen in recent history.
'The CRES (the emergency control centre) is implementing a clear policy of keeping the rally from expanding to other areas, especially to key economic zones,' government spokesman Panitan Wattanayagorn said in a television interview.
Analysts say last week's clashes, which killed 25 and injured over 800, may have hardened attitudes and could be the spark that ignites a broader, more dangerous conflict.
The stock market was down 1.7 percent at the midday break in line with falls in other regional markets, after plunging 6.8 percent last week.
Bond yields fell as investors switched to the relative safety of government debt and bet the Bank of Thailand would not raise interest rates on Wednesday because political unrest could set back the economic recovery.
'WATERMELON SOLDIERS'
Fences were erected in front of underground stations and shopping malls, where some civilians hung signs calling for peace. Troops kept close watch on high-rise buildings from where snipers could operate.
Protest leader Nattawut Saikua was noncommittal on whether a rally would actually take place on Tuesday, when he said a 'non-stop flow' of demonstrators would pour into the city.
The troop deployment in the Silom area was initially intended to break up the main protest, but the army top brass changed tactics at the last minute, he told reporters.
'The watermelon soldiers tipped us off that there was supposed to be a crackdown, but it was aborted when they saw how many of us there were,' Nattawut said.
Some rank-and-file soldiers in green uniforms have been dubbed 'watermelons' -- green on the outside with a red core.
Analysts say cracks in the armed forces along the country's colour-coded faultlines have the top brass worried about leaks and unsure of who to trust. Speculation is growing hardliners may try to stage a coup to end the five-year political crisis.
The government was forced to relieve police of responsibility to arrest 'red shirt' leaders on Friday after a bungled raid on their hotel. Elements of the police are known to be close to ousted former premier Thaksin Shinawatra, himself a former policeman, who was ousted in a 2006 bloodless coup.
The 'red shirts' accuse Thailand's elite of conspiring to topple him, and of backing the 'yellow shirts' -- representing royalists, a business elite, aristocrats and the urban middle class -- in its bid to force Thaksin and his allies out of power.
Bangkok Bank, Thailand's biggest lender has its headquarters on Silom Road. It is a target of the red shirts because Prem Tinsulanonda, a former army chief and prime minister and the top aide to Thailand's revered King Bhumibol Adulyadej, is an honorary adviser to the bank.
An uneasy calm has prevailed in the capital since the deadly clashes between troops and demonstrators on April 10. Several thousand 'red shirts' continue to rally at the Rachaprasong intersection, which they have dubbed their 'final battleground'.
The yellow-shirted People's Alliance for Democracy (PAD) staged a crippling eight-day blockade of Bangkok's airports in December 2008, which left more than 230,000 tourists stranded.
The 2008 yellow-shirt airport siege ended when a pro-Thaksin ruling party was dissolved for electoral fraud, paving the way for Abhisit's coalition to take power after a parliamentary vote the red shirts say was influenced heavily by the military.
Abhisit rebuffs claims his government is illegitimate and has refused to step down and call immediate elections.
(Writing by Martin Petty; Additional reporting by Viparat Jantraprap and Adress Latif; Editing by Bill Tarrant) Keywords: THAILAND/ (Bangkok Newsroom; +66 2 637 5610) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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