By Ambika Ahuja
BANGKOK (Reuters) - Anti-government protesters in Thailand refused to leave the streets of Bangkok on Friday, but hinted they may be able to strike a deal in the coming days to end a deadly crisis that has stifled the economy.
But after a week of calm, tensions resurfaced late on Friday when a gunman on a motorcycle opened fire near rival protesters in Bangkok's heavily guarded Silom business district, wounding two civilians and two policemen, one critically.
Channel 7 television, citing a police spokesman, said the injured officer died during emergency surgery. The spokesman could not be reached for confirmation.
Prime Minister Abhisit Vejjajiva has put forward a plan to end the rallies that have crippled the capital and scared off tourists, but it remained in limbo as rival factions squabbled over details, including a proposed early election in November.
"We are not calling off protests as yet," Jaran Ditapichai told Reuters after meeting fellow leaders. "We have a proposal for Abhisit and we will talk about it in more detail later."
The stand-off has paralysed the commercial heart of the capital for nearly two months, but its roots stretch back to the prime ministership of Thaksin Shinawatra -- a populist tycoon ousted in a 2006 military coup -- and the deep social divisions it exposed between Thailand's traditional elite and rural masses.
Thai stocks fell 2.1 percent, but other Asian markets were also in negative territory amid worries about the fallout from euro zone debt problems. The baht was little changed.
Thai stocks have now given up the gains scored on Tuesday, when the index jumped 4.4 percent in reaction to Abhisit's reconciliation plan.
"The deal is still not off the table. There are still more complications ... This stalemate could actually last for a while," said Kiatkong Decho, a strategist at CIMB Securities.
STAY OR GO?
Abhisit offered to dissolve parliament in the second half of September ahead of an election on November 14 as part of a plan to end a crisis in which 27 people have died and more than 1,000 wounded in clashes.
But that failed to convince the mostly rural and urban poor "red shirt" protesters who have refused to budge from the commercial district, where upscale malls and luxury hotels have been forced to close their doors since April 3.
A local business group put revenue losses in the area since April 3 at about 174 million baht ($5.4 million) a day.
At least 10,000 protesters rallied on Friday night at the heavily barricaded camp covering 3 sq km (1.2 sq miles) of a smart commercial district in central Bangkok.
Friday's shooting took place just 50 metres from the fortified front lines of the red shirt encampment in a business district packed with armed troops and police and close to the city's famous Patpong go-go dancing bars. No arrests were made.
Police said the wounded included two "multi colours" protesters among a group of several dozen who had gathered to voice their opposition to the red shirts near a branch of Krung Thai Bank, the same location targeted in M-79 grenade attacks on April 22 that killed one and wounded more than 80.
There were mixed signals from the red shirt camp that broadly backs Thaksin, who is loved by many among the rural poor but loathed by conservative elites and middle classes, who accuse him of corruption, autocracy, and disloyalty to the monarchy.
"Most leaders are ready to leave. A couple of leaders are still concerned that leaving the streets now would mean failure for the movement," said protest leader Kwanchai Praipanna.
Complicating the picture, Abhisit faces some opposition from the government's traditional backers after the yellow shirt group, which broadly represents the anti-Thaksin royalist elite and the middle classes, condemned his plan.
The yellow shirts, whose eight-day occupation of Bangkok's airport in 2008 helped undermine a Thaksin-allied government, said Abhisit should resign if he cannot enforce the law and end the occupation of the shopping district.
The red shirts, who had demanded immediate elections when their latest protest rally started in mid-March, say the ruling coalition lacks a popular mandate after coming to power in a controversial parliamentary vote 17 months ago.
Protest leaders are demanding a specific date for dissolution of parliament -- a technicality analysts said was probably an excuse to negotiate a better deal, including a guarantee they would not face terrorism and anti-monarchy charges.
(Additional reporting by Ploy Ten Kate; Chalathip Thirasoonthrakul and Sompoch Isarawuthakun; Writing by Alex Richardson and Martin Petty)
