Soldiers in full combat gear guarded other nearby sections of the capital, warning they would use tear gas and rubber bullets - and live ammunition in self-defense - if fighting breaks out. The army alleged demonstrators were arming themselves with small bombs, sharpened bamboo poles, acid and other homemade weapons.
The "Red Shirt" protesters - who are demanding that Prime Minister Abhisit Vejjajiva call early elections - have been occupying the tony Rajprasong district for more than a month and now are camping in nearby main roads covering several city blocks.
The increasingly tense standoff - that exploded into violence that left 25 dead earlier this month - that has shuttered 5-star hotels and glitzy shopping malls and threatens to damage Thailand's sunny image as a tourist paradise.
Security forces moved into nearby Silom Road on Monday to deter any Red Shirt incursion into the central business district, where several major banks and corporations have their headquarters.
Red Shirt security details, meanwhile, are manning checkpoints fortified by barbed wire, controlling traffic into and out of the protest zone.
The standoff in Bangkok orchestrated by the mostly poor, rural demonstrators has cost merchants tens of millions of dollars.
One hotel inside the protest zone, the Holiday Inn, closed its doors Tuesday while the neighboring InterContinental told all remaining guest to check out. Both said they would reopen next Monday. Other hotels across Bangkok reported dramatic drops in occupancy rates.
Key protest leader Nattawut Saikua canceled a rally that had been planned for Tuesday. He said that thousands of protesters were instead shoring up their defenses while their guards dressed in black, some with bulletproof vests, set up new checkpoints in the areas they now occupy.
Red Shirts were seen sharpening hundreds of long bamboo rods and piling them into tall stacks, part of an arsenal of crude weaponry that also included broken up pavement stones.
"We will fortify our rally campground to ward off any invasion before we go out to wage a big war," he said.
Nattawut said that once troops move out of the nearby Silom Road, the Red Shirts would stage a march down that road.
He also indicated that the demonstrators were open to negotiations to end 40 days of confrontations and chaos in the city.
"Our group is always open to outsider suggestions.
Whatever group wants to propose a solution to the crisis, we're happy to hear these solutions," Nattawut said.
But there was no immediate sign a compromise was in the offing, although Abhisit - speaking on government-run television channels Monday night - said he would not set a date for protesters to be forced out of their encampment.
The army signaled Tuesday it would be willing to suppress unrest with force. Security forces were previously were told to abide by seven-stage rules of engagement, where warnings would be followed by a slowly escalating use of force, meant to minimize casualties.
However, Col. Sansern Kaewkamnerd, spokesman for the government's Center for the Resolution of the Emergency Situation, said the guidelines were being adjusted because the authorities had found that "terrorists infiltrating the demonstrators were preparing to use weapons such as throw-type bombs, sharpened sticks and sticks tied with nails, as well as acid." A statement from the center said that "throw-type tear gas may also be used with water cannons and rubber bullets" to suppress violence.
Weapons carried by the soldiers include shotguns, which can be used for firing rubber bullets, assault rifles, and truncheons. Sansern affirmed Monday that officers have the right to use weapons to protect themselves if their lives are threatened.
A failed April 10 attempt by security forces to flush protesters from another neighborhood erupted into the worst political violence Thailand has seen in 18 years, leaving 25 dead and more than 800 wounded.
The protesters consist mainly of poor rural supporters of former Prime Minister Thaksin Shinawatra and pro-democracy activists who opposed the military coup that ousted him in 2006.
They believe Abhisit's government is illegitimate because it came to power through a parliamentary vote after disputed court rulings ousted two elected, pro-Thaksin administrations. The conflict has been characterized by some as class warfare, pitting the country's vast rural poor against an elite that has traditionally held power.
