By Ambika Ahuja and Panarat Thepgumpanat
BANGKOK (Reuters) - Thai authorities said on Thursday they would intensify efforts to contain anti-government protests in Bangkok, after a soldier was killed in the latest clash of a campaign to force early elections.
The "red shirt" supporters of ousted former premier Thaksin Shinawatra were hunkered down in their makeshift encampment in the capital after skirmishes with Thai troops on Wednesday in Bangkok's northern suburb left 19 wounded.
The increasingly violent protests and the economic toll they are taking on Southeast Asia's second-largest economy is piling more pressure on Prime Minister Abhisit Vejjajiva to break up the red shirt camp in a ritzy shopping district of the capital.
Army spokesman Sansern Kaewkamnerd told Reuters troops at checkpoints on roads leading into the area would stop people bringing in weapons and might discourage more from going in.
"We will continue to try to separate the innocent from those who are bent on violence," he said, adding it would not be easy, since many protesters were no longer wearing their usual red shirts in order to be less conspicuous.
Reuters reporters said the troop presence was not especially heavy, with only sporadic checkpoints on roads around the encampment.
YELLOW SHIRTS GATHER
About 300 supporters from the rival protest group, the "yellow shirts," went to the heavily fortified army barracks that Prime Minister Abhisit Vejjajiva is using as a command centre to demand that he disperse the red shirt encampment.
"The red shirts have created a state within a state and they are getting away with it with impunity," said Suriyasai Katasila, a spokesman for the group that closed down Bangkok's main airport for a week in late 2008 and helped bring down a pro-Thaksin government. "The authorities must put an end to this."
The violence has had a devastating effect on Thailand's tourist industry, which accounts for 6 percent of the economy and 15 percent of the workforce. Arrivals at Bangkok's Suvarnabhumi Airport have fallen by a third since violence broke out.
The central bank is due to release economic forecasts on Thursday and is likely to revise down its forecast of GDP growth of between 3.3 and 5.3 percent this year.
The Finance Ministry said on Thursday the economy grew 8-9 percent in the first quarter from a year earlier, reflecting the recovery from recession at the start of 2009.
But the outlook for the second quarter is uncertain given the hit to tourism, consumer confidence, and investment from the unrest.
The stock market was up 0.4 percent at 0545 GMT but Kim Eng Securities, Thailand's top brokerage, warned that investors may be underestimating the economic impact of the turbulence.
"With 60 percent of GDP growth hinging on consumption, there is downside risk," it said.
Wednesday's violence flared when a group of some 2,000 red shirts moved out of the central shopping area to meet supporters in a northern suburb.
Soldiers barred the way and fighting erupted on a crowded highway 40 km (25 miles) north of central Bangkok. Troops fired rubber bullets and live rounds, first in the air and then into the charging protesters, Reuters witnesses said.
The red shirts hurled stones, shot metal balls from sling-shots and launched fireworks at soldiers and police.
Witnesses said the dead soldier was shot through the helmet while riding on a motorbike towards security forces, apparently caught in friendly fire. Another soldier was among 19 wounded.
The fighting stopped when a rainstorm drenched the area.
NO VICTORY FOR EITHER SIDE
"The red shirts were testing the will of the security forces and now we saw that the government is getting serious about this," said Somjai Phagaphasvivat, a professor at Thammasat University. "But it's hard to pronounce victory for either side."
In all, 27 people have died and nearly 1,000 have been wounded in the latest episode in a five-year political crisis.
Several thousand "red shirts" remained in their encampment behind medieval-like barricades made of truck tyres, bamboo poles and chunks of concrete.
Hopes of a deal to end the violence faded after British-born, Oxford-educated Abhisit rejected a proposal by the protesters for an election in three months, saying he would not negotiate in the face of threats.
The red shirts oppose what they say is the unelected royalist elite that controls Thailand and broadly back Thaksin, who was ousted in a coup in 2006 but before that built up a following among the poor through rural development and welfare policies.
The former telecoms tycoon was convicted in absentia on corruption-related charges and lives abroad to avoid jail.
(Additional reporting by Adrees Latif, Chalathip Thirasoonthrakul and the Bangkok bureau; Writing by Alan Raybould; Editing by Bill Tarrant)
