Army Commander General Anupong Paochinda told a news conference on Tuesday that the military was 'on the people?s side'.

Thai Prime Minister Samak Sundaravej earlier on Tuesday declared a state of emergency in Bangkok and gave the army control of public order after a man died in overnight clashes between pro- and anti-government protesters.

Mr Samak said the state of emergency would not last more than a few days.

'I will do my best to normalise the situation as soon as possible,' he said in a televised news conference.

Under the sweeping emergency powers announced on television and radio, all public gatherings in the capital will be banned and restrictions imposed on media reports that 'undermined public security'.

'There is an urgent need to solve all these problems quickly. Therefore, the prime minister declares a state of emergency in Bangkok from now on,' the announcement read.

Although the deployment of troops will come as welcome relief to the overstretched police, it raises the spectre of an army seizure of power less than two years after the military kicked out then Prime Minister Thaksin Shinawatra.

Leaders of the anti-government protest movement that has occupied Mr Samak's official compound for the past week said they would not be moving. They are camped out behind makeshift barricades of razor wire and car tyres.

'There are not enough jails to put us all into,' Mr Chamlong Srimuang, one of the leaders of the People's Alliance for Democracy (PAD) that is leading the anti-government protests, told thousands of supporters inside the compound.

He called for more people to join in the protest against Mr Samak, whom the PAD accuses of being an illegitimate proxy for Thaksin. His rallying cry will have gone out across the country via the PAD's radio and satellite television channels.

Morning rush-hour traffic in Bangkok appeared slightly lighter than normal and some schools were shut.

The Thai baht hit a one-year low of 34.47 per dollar, down 0.6 per cent from late Asian trade on Monday, and the stock market was expected to open lower at 11am.

'We will definitely see at least a five-point fall, but the fall should be capped by buying from investors who are now starting to snap up cheap stocks as they are betting the life of this government might end soon,' said Tisco Securities strategist Viwat Techapoonphol.

That implies a drop of around 0.75 per cent. The market has fallen around 23 per cent since the street protests began in May.

Soldiers sent in
At least one man was killed and 34 hurt in the overnight clashes between the PAD and pro-government supporters near Government House, the worst outbreak of violence since the PAD launched its street campaign.

Around 400 soldiers armed with batons and shields were sent to back up police struggling to contain the skirmishes. Several shots were fired, but it was not clear by whom.

PAD leader Suriyasai Katasila told Reuters the 55-year-old victim was not from his side.

After the clashes, the street was strewn with rocks and broken glass, and several pools of blood were on the pavement.

Supporters of Mr Samak, who leads a six-party coalition, having come first in December's general election, started erecting a series of tents along the tree-lined avenue 200 metres (yards) from the PAD barricades, making further clashes likely.

The PM's announcement blamed certain people, whom he did not name, for 'wreaking havoc' and said their actions were undermining the economy and national unity.

The PAD, a group of right-wing businessmen and activists whose 2006 street campaign contributed to the coup against Thaksin, argue that Mr Samak is an illegitimate proxy for the former telecoms billionaire, now in exile in London.

Thaksin and his wife jumped bail last month to avoid corruption charges.

The PAD also paints itself as a guardian of revered King Bhumibol Adulyadej against a supposed Thaksin campaign to turn Thailand into a republic, a charge denied by both Thaksin and the government. -- REUTERS

Read Nirmal Ghosh's first hand account of the early morning clash.