With chances of further violence, all eyes are on the stock market, one of Asia's most buoyant this year, which traders say is likely to take a hit on Monday.
The Bangkok Post daily, citing unnamed sources, said Prime Minister Abhisit Vejjajiva could dissolve parliament in six months - three months sooner than his most recent proposal. Some government figures saw this as the best way to break the impasse, it said. He has to call an election by the end of 2011.
"They believe an announcement by the prime minister on a timeline for him to dissolve parliament - regardless of how the red shirt United Front for Democracy against Dictatorship reacts - might be the best way for him to hang on to his job," it said.
He would not announce this until after the Songkran holiday this week, it said, without explaining why. Songkran, the Thai New Year, runs from Tuesday to Thursday, but the government also made Friday, April 16, a holiday long before the protests began.
A government spokesman said on Sunday a line of communication with the red shirts was open but conditions were not right for formal talks. The government announced a state of emergency on April 7 forbidding public gatherings of more than five people.
"As long as they are still breaking the law, that makes it difficult," spokesman Panitan Wattanayagorn said.
Thousands of red shirt protesters, pushing for Abhisit to leave the country as well as dissolve parliament, are in defiant mood after the army failed to move them from one of two Bangkok bases where they have camped out for a month.
"We don't negotiate with murderers," red shirt leader Weng Tojirakarn said on Sunday. "We have to keep fighting." Deputy Prime Minister Suthep Thuagsuban said the government would have to continue the operation to take back public areas, but a truce called on Saturday may last a few days.
"It will take some time before we can restart the operation. What happened caused serious hurt to our troops and they need time," he said. Four soliders were among the dead.
The red shirts are mostly rural and working-class supporters of ex-premier Thaksin Shinawatra, ousted in a coup in 2006.
Saturday's fighting, the worst political violence in the country since 1992 and some of it in well-known Bangkok tourist areas, ended after security forces pulled back late in the night.
Most of the deaths occurred after red shirts attempted to get into a Bangkok army base and were repulsed. Troops then advanced on a 'red shirt' camp and fighting spread around the area, including well-known tourist haunts such as such as Khao San Road.
The red shirts, still numbering in the thousands, have occupied two main areas of the capital, a city of 15 million. They made no attempt to come out of their bases on Sunday and troops did not make any move toward them.
Foreign investors have been ploughing money into Thai stocks this year but the outbreak of violence since the middle of last week caused them to pause. The stock market is open on Monday, closed from Tuesday to Thursday, but open on Friday.
