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BANGKOK (Reuters) - Thai Prime Minister Abhisit Vejjajiva on Saturday a rejected a new, compromise offer by anti-government red-shirt demonstrators to end weeks of increasingly violent protests in return for early polls.
The red-shirted supporters of ousted former premier Thaksin Shinawatra immediately removed their offer to end a three-week occupation of Bangkok's ritzy shopping area if the government dissolved parliament and announced elections in 30 days.
Abhisit said the peace overture looked insincere and designed only to improve the protesters' image. "They keep saying they will escalate the situation. That's why the government cannot consider the proposal," he told reporters.
The mostly rural and working-class red-shirts responded by threatening more aggressive measures, including laying siege to Central World, the second-largest shopping complex in Southeast Asia, next to the stage at their main protest site.
"If you want Central World shopping mall back safely, you must withdraw army forces out of the nearby Rajaprasong area immediately," a protest leader Jatuporn Prompan told supporters.
The shopping center has been closed since the protesters occupied the area on April 3.
The risk of violence remains high after a series of grenade blasts that killed one person and wounded 88 on Thursday in Bangkok's business district, an attack the government blamed on the red-shirts, who deny they were responsible.
As part of their demands, the red-shirts also want an independent probe into an April 10 clash between protesters and the army that killed 25 people and wounded more than 800 in Thailand's worst political violence in nearly two decades.
Thousands of troops, many armed with M-16 assault rifles, keep watch over red-shirts at several city intersections. Royalist pro-government protesters often gather outside their fortress-like barricade, sparking clashes in which both sides hurl bottles and insults.
Jatuporn encouraged some protesters to do away with their signature red shirts to make it more difficult to separate them in the capital city of 15 million people. "We will take off our red shirt and wear other colors, but our goal and our ideals are still the same," he said.
Tens of thousands of red-shirts remain encamped at the central Bangkok shopping district, vowing to stay until parliament is dissolved and defying a state of emergency that bans large gatherings of protesters.
"This hardening of the battle lines between the two sides does not bode well for Bangkok's security situation and a risk of another, and this time maybe even more violent, crackdown is immediate," risk consultancy IHS Global Insight said in a note.
The military says the crowd includes "terrorists" willing to use violence to bring down the government and overturn the monarchy and wants to go after them, not peaceful protesters.
"We're ready to wipe out terrorists and we'll do it at an appropriate time," army spokesman Sansern Kaewkamnerd said.
"We need to make sure very few innocent people are there before doing anything."
Analysts say the protests are radically different from any other period of unrest in Thailand's polarizing five-year political crisis -- and arguably in modern Thai history, pushing the nation close to an undeclared civil war.
Diplomats and analysts say the army's middle ranks look dangerously split with one faction backing the protesters led by retired generals allied with Thaksin, who was ousted in a 2006 coup and later sentenced in absentia for corruption.
The red-shirts say British-born and Oxford-educated Abhisit came to power illegitimately in December 2008, heading a coalition the military cobbled together after courts dissolved a pro-Thaksin party that led the previous government.
They chafe at what they say is an unelected elite preventing allies of twice-elected Thaksin from returning to power through a vote. Thaksin lives in self-imposed exile, mostly in Dubai.
The United Nations and foreign governments have urged both sides of the political divide to show restraint.
The central bank in Southeast Asia's second-biggest economy said this week the crisis was hitting confidence, tourism, private consumption and investment. Ratings agency Fitch has cut its outlook on Thailand's local currency because of the strife.
A powerful backlash against the red-shirts is also growing among Bangkok's royalist establishment. A pro-government group calling themselves "multi-colored shirts" have begun daily rallies in the capital demanding the red-shirts go home.
Additional reporting by Panarat Thepgumpanat; Editing by Louise Ireland