Grenade attacks that wounded two soldiers at a Thai military base raised tensions in Bangkok today as tens of thousands of anti-government protesters massed at another barracks on the outskirts of the city.
It was unclear who was behind the attack or whether it was directly linked to the protests by red-shirted supporters of ousted prime minister Thaksin Shinawatra.
But it came shortly after Prime Minister Abhisit Vejjajiva rejected demands by protesters to dissolve parliament and call fresh elections by midday.
Backed by the powerful military and establishment elite, Mr Abhisit told a live national broadcast, flanked by members of his shaky coalition, the time was not right for a poll, which analysts say Mr Thaksin's allies would likely win.
Army Colonel Nattawat Attanibutt said an initial investigation showed the grenades were fired into the sprawling army compound by a M-79 grenade launcher from outside the base on Viphavadi-Rangsit Rd. The soldiers were hospitalised.
The turbulence adds to a prolonged political crisis broadly pitting the military, urban elite and royalists - who wear yellow at protests and back Mr Abhisit - against mainly rural Thaksin supporters who wear red and say they are disenfranchised.
Cheering, blaring horns, and waving flags, the protesters had marched to a separate military base on the outskirts of Bangkok where Mr Abhisit set up a crisis headquarters.
After their deadline for dissolving parliament passed, protesters retreated from the military base to their main protest site, reinforcing speculation Mr Abhisit would prevail in the "red shirt" showdown.
"We have heard the answer from Abhisit. We have done what we came to do and we will assess what to do next," Veera Musikapong, a protest leader, told the crowd under scorching midday sun.
Crowds chanted: "Abhisit, get out. Elite, get out."
The protests, which began on Friday, reached as many as 150,000 people yesterday but have been peaceful and orderly.
Most of the protesters travelled from Thailand's poor, rural provinces, piling into pick-up trucks, cars and even river boats, illustrating Mr Thaksin's influence despite his removal in a 2006 coup, a graft conviction and self-imposed exile.
Mr Thaksin's allies are likely to win the next election, which must called by the end of next year, just as they have won every poll held since 2001. The military and urban elite could seek to thwart that result, possibly with a coup, as in 2006, or a judicial intervention, as in 2008.
Thailand was plagued by political upheaval in 2008, when yellow-shirted protesters who opposed Mr Thaksin's allies in the previous government occupied the prime minister's office for three months and then blockaded Bangkok's international airport until a court ousted the government.
The "red shirt" protesters say the British-born, Oxford-educated Mr Abhisit came to power illegitimately, heading a coalition the military cobbled together after courts dissolved a pro-Thaksin party that led the previous coalition government.
Adding to their anger, Thailand's top court seized $1.4 billion of Mr Thaksin's assets last month, saying it was accrued through abuse of power.
Mr Abhisit insists his government came to power legitimately. While his party came in second in the last election in 2007, he won the support of the majority in parliament.
Last April, protests by Thaksin supporters triggered Thailand's worst street violence in 17 years. In recent months, they have emphasised non-violence - and Mr Thaksin's rhetoric is less incendiary than last year when he spoke of a "revolution."
Agencies