Tanks were seen on the street, but sources said they were involved in an 'exercise'.
The government asked the military to stay in their barracks as rumours circulated that the army was plotting a coup amid protests, a spokesman said.
'I would like to inform all military personnel to carry out your duty as usual. Do not make any movement or be on stand-by. This is to stop the coup rumours,' Mr Nattawut Saikuar said on national radio.
Thailand has been on edge for days as thousands of anti-government demonstrators forced the ongoing closure of Bangkok's two airports.
The powerful army chief has urged Prime Minister Somchai Wongsawat to call new elections to end the turmoil, but he has refused.
The army is under pressure to enforce law and order in the wake of the right wing People's Alliance for Democracy's (PAD) takeover of Bangkok's two main airports.
On Wednesday, Gen Anupong called for Parliament to be dissolved and new elections to take place. This was rejected by both Somchai and the PAD.
Meanwhile the PAD is preparing to mount a protest at the headquarters of Thailand's Air Traffic Control authorities on Sathon Road in Bangkok's business district at 6pm.
A senior official at the Air Traffic Control office said 200 police were guarding the office but 'if 10,000 come we can do nothing'.
He said if the PAD took over the building, it would paralyse air traffic control and Thai airspace would have to be closed.
Pressure is building on Thailand's military to intervene in the political crisis which is threatening to descend into widespread civil unrest.
Mr Somchai began an urgent cabinet meeting in the northern city of Chiang Mai amid Thai media reports that he was considering a state of emergency to end increasingly violent anti-government protests in Bangkok.
Rumours of the army preparing to launch a coup swept the capital. 'They are 100 per cent on standby,' a high-ranking former military officer told Reuters.
Thailand's three-year-old political crisis has intensified since the PAD began a 'final battle' on Monday to unseat a government it accuses of being a pawn of former leader Thaksin Shinawatra, ousted in a 2006 coup.
A PAD blockade of Bangkok's Suvarnabhumi airport, a major Asian air hub where all flights were cancelled, entered its third day, stranding thousands of tourists.
Protesters also laid siege to the old Don Muang airport, shutting what is a big domestic hub and severing air links to the city of eight million people.
'We appreciate this has affected private business, but the cause of the problem is this government,' PAD leader Somsak Kosaisuk told reporters at Don Muang.
'We know this government is nearing its end,' said Somsak, whose group defied a Wednesday night court ruling ordering it to cease the airport protests.
Mr Somchai said cabinet would consider unspecified 'measures' against the PAD, fuelling speculation he will declare a state of emergency in Bangkok. However, as with the last emergency rule in September, the army appears reluctant to move against the PAD.
'If the government insisted on dispersing the crowd, the army will meet again to find new measures. We already have a contingency plan,' Colonel Sunsern Kaewkumnerd told reporters.
Tension has been rising across the country. A rival pro-government group has threatened to hit the streets against the PAD, and there were reports of gunfire during the night near Government House, the prime minister's compound occupied by the PAD since August. No injuries were reported.
In Chiang Mai, a pro-government gang shot dead an anti-government activist after dragging him from his car. The long-running unrest has paralysed government decision making, stirring fears it could exacerbate the impact of the global slowdown and tip the export-driven economy into recession.
Tourism, a key sector that lures nearly 15 million visitors year, is particularly under threat. At Suvarnabhumi airport, tourists turned up only to find yellow-shirted PAD supporters milling around and few airport officials in sight.
'I'm worried because our visas expired yesterday and I don't want to go into town because we have no money and we might get arrested,' said South African backpacker Deon Bunding, who also had his wallet stolen on the bus from the island of Koh Samui. -- SPH