Bangkok under curfew after fresh violence

BANGKOK (Reuters) - Bangkok emerged from an overnight curfew on Thursday after the Thai capital was plunged into a day of rioting and fires in the aftermath of military action to disperse a camp of anti-government protesters.

The capital, in the grip of protests by "red shirt" activists for six weeks, fell quiet as the 8 p.m. to 6 a.m. (1300 to 2300 GMT) curfew came into effect, though isolated skirmishes were reported in darkened streets.

At least six people died in the turmoil after troops in armored vehicles pushed into the city-center camp, prompting protest leaders to surrender. Troops, authorized to shoot looters and arsonists, pursued operations through the night.

Authorities imposed the curfew initially on the capital, but later extended it to 21 provinces -- about a third of the total -- after outbursts of unrest in seven regions, particularly in the north, a "red shirt" stronghold.

"I am confident and determined to end the problems and return the country to peace and order once again," Prime Minister Abhisit Vejjajivahe said in a televised address on Wednesday night.

Thailand's Stock Exchange, which closed early on Wednesday, was to remain shut on Thursday and Friday, along with banks.

Analysts said some investors bought shares on Wednesday, nudging the benchmark stock index up 0.71 percent, on news that the military had dispersed the protesters.

NEW VIOLENCE OR RESPITE?

Wednesday's unrest, with 27 buildings set ablaze in Bangkok, including the stock exchange, was the "most widespread and most uncontrollable" political violence Thailand has ever seen, said political historian Charnvit Kasetsiri.

Town halls were set alight in three northern areas.

It was uncertain whether the rioting represented a final outpouring of protesters' anger or whether they would intensify despite the scope of the curfew.

A respite would give Thai markets some limited relief.

Further violence would suggest a new phase in Thailand's political crisis, with the country moving toward the worst-case scenarios of prolonged unrest, profoundly negative for markets.

Protesters demand a new election and dismiss Abhisit as lacking a proper mandate after coming to power in a controversial parliamentary vote in 2006 with tacit military support.

In Washington, Kurt Campbell, U.S. Assistant Secretary of State for East Asia and the Pacific, told reporters talks were planned with Thai diplomats and officials.

A news blackout was imposed and local TV ran programs of dancing and flag-waving Thais, periodically interrupting them for government statements.

The protesters, mostly rural and poor city dwellers, broadly support former Prime Minister Thaksin Shinawatra, a populist billionaire ousted in a 2006 coup and living in self-imposed exile to avoid jail on a graft conviction.

Thaksin said the crackdown could spawn guerrilla warfare.

"There is a theory saying a military crackdown can spread resentment and these resentful people will become guerrillas," he told Reuters by telephone from an undisclosed location.

The offensive was launched a day after the collapse of proposed talks aimed at ending weeks of confrontation. More than 70 people have been killed and nearly 2,000 people wounded since the demonstrations began in mid-March.

(Additional reporting by Nopporn Wong-Anan and Ambika Ahuja; Writing by Ron Popeski; editing by Ralph Boulton)