The battle for Bangkok showed signs of subsiding Monday as Thailand's army took a firmer stand against rioting antigovernment protesters, while exiled former leader Thaksin Shinawatra backed away from his earlier call for a full-scale revolution and instead urged peaceful protests.
The army's tough response against thousands of red-wearing protesters will come as a relief to Prime Minister Abhisit Vejjajiva, 44-years-old.
At the weekend, it was unclear whether Thailand's politically powerful armed forces were willing to put their weight behind Mr. Abhisit's government after several hundred demonstrators simply pushed their way past troops to derail a major economic conference involving China, Japan and other regional powers in the seaside town of Pattaya.
But on Monday, troops marched on the red-shirts, as they are known, firing live rounds into the air from automatic rifles and turning the momentum against the demonstrators. The protesters responded by throwing Molotov cocktails and, in one instance, revving up a driverless bus and sending it careening toward army lines.
By late afternoon, soldiers had cleared most of the intersections which protesters had barricaded with commandeered buses and burning tires. Many of the protesters retreated to Bangkok's main government complex to make a final stand with several thousand other protesters who have been camped out there for a week. Armed with rocks, stakes and other improvised weapons, the prospect of more casualties joining the 79 people already injured is real.
Meanwhile, a gunbattle in a residential area of the Thai capital caused the first fatality in the political street fighting Monday, the Associated Press reported, but it was unclear whether the army was involved. Minister Sathit Wongnongtoey told the Associated Press that the fighting broke out around a market between area residents and hundreds of protesters. One person was shot in the chest and died, officials said, while two other people were wounded.
Monday's chain of events confirmed the central role Thailand's army plays in determining the balance of power here.
While Mr. Thaksin, 59 years old, showed strong authoritarian tendencies before being unseated by a military coup three years ago, his supporters say he at least gave a voice to ordinary Thais who have been left behind by decades of economic development.
Mr. Thaksin's critics, meanwhile, say he used his widespread support to ride roughshod over Thailand's system of parliamentary checks and balances to cement his own increasingly dictatorial rule.
The army holds the balance of power and frequently sides against Mr. Thaksin, not just during lead-up to the 2006 coup, but since then, too.
Last year, a rival group of yellow-clad protesters invaded and occupied Bangkok's airports to press for the resignation of a pro-Thaksin government which was in power at the time. The army did nothing to stop them. The result: the pro-Thaksin government collapsed after being given an added push by Thailand's courts, which ruled that main parties in the coalition should be dissolved for electoral fraud.
The military's political power is one of the red-shirted protesters' chief grievances. One of their leaders, Jakrapob Penkair, said in an interview Monday that the armed forces' repeated interventions in Thailand's democracy have deprived ordinary Thais of an adequate voice in their own country. "We're going to stand firm for as long as it takes," Mr. Jakrapob said.
On Monday, Mr. Thaksin tacitly acknowledged that the protest movement was in retreat in an interview with CNN where he called for peaceful protests. "War never ended with war," he said.
While Mr. Thaksin also accused the army of covering up deaths of protesters -- an accusation the Thai government denies -- his remarks were a striking turnaround from the day before when he called on his supporters to rally together in a full-scale revolution.
In another sign of the red-shirts' desperation, one of Mr. Thaksin's old allies, former Senate President Suchon Chaleekuea, publicly petitioned Thailand's King Bhumibol Adulyadej to intervene in the conflict, as he has done on several occasions in the past. Knowledgeable commentators said it was unlikely the 81-year-old monarch would agree to the request.
"The tide is turning against the red-shirts a little bit," said Thitinan Pongsudhirak, a political science professor at Bangkok's Chulalongkorn and well-followed commentator on Thai affairs. "Petitioning the king is a sign of the red-shirts' desperation. Without the army's support, they don't have any powerful backers and there is no tipping point for them."
While the red-shirts may be losing the battle for Bangkok, political analysts say they have nevertheless established themselves as a potentially long-lasting force in Thailand.
"The events of the past two weeks have revealed an effective and sophisticated organization," argues Michael Montesano, a research fellow at the Institute of Southeast Asian Studies in Singapore. As many as 100,000 people joined the red-shirt protests in Bangkok before the rallies degenerated in a series of violent cat-and-mouse skirmishes with police.
Thailand's financial markets are closed the Thai New Year holiday and won't open until Thursday.
But ratings agencies Standard and Poor's and Moody's Investors Service acknowledged the longer-term dimensions of the conflicts on Monday. S&P said the latest conflicts have increased downward pressure on its Thailand's credit outlook while Moody's said it is monitoring developments in Thailand.
"We would look upon this as almost a structural weakening in Thailand where we wouldn't see political stability being regained for a long time," Thomas Byrne, senior vice president and regional credit officer at Moody's, told Dow Jones Newswires.
In recent days, the prime minister, Mr. Abhisit, has mentioned the possibility of constitutional reforms to address some of the protesters' grievances. The current constitution was drafted by a military-appointed panel in the days following the 2006 and enshrines fewer democratic rights than the previous charter while bolstering the military's powers.
Despite Mr. Abhisit's tentative olive branch, many analysts say Thailand is still a volatile mix of competing interests with little common ground where a compromise could be struck.
"Neither an election nor a mediated process of reconciliation is likely to resolve Thailand's present revolutionary situation," Mr. Montesano contends. "A free election will return the Thaksinites to power, thus provoking his enemies all over again; an unfree election will only stir the red shirts into more intense opposition to the prevailing order."
—Ditas Lopez in Singapore contributed to this article.