By Ambika Ahuja
BANGKOK (Reuters) - Thailand's "red shirt" protesters congregated at a ritzy Bangkok shopping district on Wednesday, preparing a "final battleground" in their campaign to oust army-backed Prime Minister Abhisit Vejjajiva.
The focus on the commercial heart of the city of 15 million comes as the death toll from Thailand's bloodiest political violence since 1992 rose by two -- a protester and a soldier -- to 23 and as the prospect of further impasse looked set to clip growth in Southeast Asia's second-largest economy.
"We will use the Rachaprasong area as the final battleground to oust the government," protest leader Nattawut Saikua told reporters on Wednesday, referring to the hotel and shopping district a couple of blocks from Bangkok's financial area.
"There will be no more negotiations."
The "red shirts," who have vowed "final" days of reckoning before, want Abhisit to quit office and dissolve parliament ahead of new elections. They began leaving a protest site close to Saturday's clashes to consolidate at Rachaprasong, which they have occupied for the past 10 days.
The geography of the area, and the presence of families, tourists and expatriates, would make it difficult for troops to move in again with force.
It is home to Central World, the second-largest shopping complex in Southeast Asia, and other big malls, which shut their doors when the protests began.
"They are holding the economy as their hostage," said Ramkhamhaeng University political scientist Boonyakiat Karavekphan.
NIGHT OF REVELRY
Bangkok was peaceful on Wednesday during the second day of the three-day Thai New Year called Songkran, after protesters called off a planned a march on an army base where Abhisit has taken shelter during the month-long campaign.
Tens of thousands of revellers took to the streets of Bangkok on Tuesday night, dousing each other with water and flour in traditional celebrations.
But tension could flare again when the holiday ends, and financial markets are likely to see renewed selling when they reopen on Friday.
Abhisit, who had been expected to ride out the storm, appears more vulnerable now after the surprise announcement this week of an investigation into possible corrupt funding of his party and comments from the army chief that only polls could end a crisis that has gripped Thailand since 2006.
Abhisit has said he could call elections by the end of the year, although his hand could be forced by a recommendation this week from the Election Commission that his Democrat Party should face charges of illegal funding.
If a court upholds the charges, Abhisit, who came to power in 2008 when the army brokered a deal in parliament, could be banned from holding office and Thailand's oldest political party could be dissolved. Any prosecution could take months, however.
Chumpol Silpa-Archa, leader of the Charthai Pattana party, said coalition partners still supported Abhisit but the crisis needed to be resolved.
"We have no intention to pull out, but we want to see a clear roadmap to resolve the crisis, which eventually leads to a dissolution of parliament," he said.
Coalition partners have been calling on Abhisit to dissolve parliament within six months.
Deputy Prime Minister Suthep Thuagsuban ordered police to hunt for "terrorists" the government blames for the killings in the old quarter on Saturday. More than 800 people were injured in the army's failed attempt to eject protesters from that site.
"We believe there were terrorists who were ambushing in the area," army spokesman Sansern Kaewkumnerd said, adding troops used live rounds either to shoot in the air or in self-defence.
"In the cases of self-defence, it was done to protect themselves while pulling back rather than targeting opponents." he said. "They were firing one bullet after another, rather than spraying a whole round."
The streets are still spattered with blood, and makeshift Buddhist shrines have been set up near wrecked army personnel carriers daubed with Thai graffiti, such as "tyrant Abhisit."
The confrontation pits the mostly rural and working-class supporters of former prime minister Thaksin Shinawatra, ousted in a 2006 coup and now living abroad, and a traditional elite represented by the British-born and Oxford-educated Abhisit.
Investment bank Morgan Stanley calculates economic growth this year could be cut by 0.2 percentage points due to the impact on tourism, which accounts for 6 percent of gross domestic product in the "Land of Smiles" and employs 1.8 million people.
(Writing by Nick Macfie; Editing by Bill Tarrant)
