By Ambika Ahuja
BANGKOK (Reuters) - "Red shirt" protesters in Thailand will consider on Tuesday a proposal by Prime Minister Abhisit Vejjajiva for an election on November 14, aimed at ending a two-month political crisis in which 27 people have been killed.
The prospect of an end to the crisis should bolster Thai stocks when trading opens, analysts said.
Abhisit, who is backed by Thailand's royalist establishment, rejected an offer last month by the mostly rural and urban poor protesters to end their occupation of Bangkok's main commercial district in return for elections within three months.
"This is quite constructive," Weng Tojirakarn, a protest leader, told Reuters after Abhisit announced the plan late on Monday. "So we will be discussing the prime minister's proposal seriously."
The Thai bourse has fallen 3 percent over the past month as violence grew, bucking the positive trend elsewhere in Asia, but analysts said share prices should rise when the market reopens after a long holiday weekend.
"Market momentum is definitely going to get better and this is primarily driven by the prime minister's televised proposal last night," said Sukit Udomsirikul at Siam City Securities.
"We expect a significant rise of at least 2-3 percent ... Whether this is a game-changing plan, we'll find out. We're quite optimistic this may end eight weeks of deadly protests that have shut down Bangkok," he said.
The finance minister said last week the protests could cut growth by 2 percentage points if they continued all year.
CRUCIAL TIMEFRAME
Abhisit had previously offered an election in December, about a year before his term ends, and some analysts doubted whether the slightly earlier date would satisfy the "red shirts," who broadly back former Prime Minister Thaksin Shinawatra.
They say both sides want to be in power in September for two critical events -- a reshuffle of leaders in the military and police force, and the passing of the national budget.
If Thaksin's camp prevails and is governing at the time of the military reshuffle, analysts expect big changes, including the ousting of generals allied with Thailand's royalist elite, a prospect royalists fear could diminish the power of the monarchy.
"The game plan is for the government to make it appear this offer is reasonable. If the red shirts reject it, they'll be seen as the unreasonable party and that will then give the government a chance to go after them," said Roberto Herrera-Lim, an analyst at risk consultancy Eurasia Group.
"It doesn't seem like much of a compromise," he added. "This just shows how crucial the timeframe is and the importance of having that reshuffle of the military and police take place before an election. Judging by the goals of the red shirts, I don't think they'll go along with this."
Abhisit is under intense pressure to end the political stalemate that has choked off tourism, forced posh hotels and malls to close and prompted the International Crisis Group to warn Thailand could slide into an "undeclared civil war."
In a televised statement, Abhisit set five broad conditions for reconciliation that must be agreed before any election.
The monarchy, he said, should not be dragged into politics or "violated" -- a condition that follows government accusations that some "red shirts" aim to overthrow the monarchy.
The second condition calls for reforms to address social injustice, the third proposes an independent body to monitor media to ensure unbiased reporting, the fourth is a committee to investigate the recent political violence and the fifth covers possible, unspecified constitutional amendments.
They were written in language broad enough to appeal across the political spectrum, leaving the date of the new election still as the main sticking point.
"No one is going to disagree with the five conditions. They are just decoration because that's the language you use in any call for national reconciliation. But the point is that this is the first concrete offer from the government," said Chiang Mai University political science professor Thanet Charoenmuang.
"The ball is now in the red shirts' court to see if they want something they can hold on to, get their victory and go home, or keep pushing forward into an uncertain future."
The red shirts say Abhisit lacks a popular mandate after coming to power in a controversial parliamentary vote 17 months ago, heading a coalition cobbled together with military help.
On Tuesday, protesters remained in a fortified encampment in Bangkok's main shopping area. Army spokesman Sansern Kaewkamnerd has said the security forces could use armoured vehicles to disperse them but no move has been made to do that.
(Additional reporting by Ploy Ten Kate, Jason Szep, Vithoon Amorn and Martin Petty; Writing by Alan Raybould; Editing by Raju Gopalakrishnan)
