The usually bustling business area near Lumpini Park was tense and quiet after fighting until dawn. Soldiers were earlier seen using tear gas and water cannon before dawn at Nana intersection, packed with shops and racy go-go bars.

Shots and loud bangs were heard in several areas of Bangkok, but police said they were warning shots fired into the air to frighten the red-shirted protesters, who remained defiant, standing their ground at their barricades and new checkpoints.

The latest violence followed tough security measures imposed on Thursday evening to reclaim Bangkok's commercial district after the collapse of a reconciliation plan proposed last week by Prime Minister Abhisit Vejjajiva.

Troops had yet to seal off all roads surrounding the main protest site as earlier promised, raising questions over whether Abhisit would succeed in dispersing them and adding to uncertainty in Thailand's financial markets.

Gun fire, explosions and sporadic fighting continued into the night around army checkpoints near the main protest site, which was protected by barricades made from tyres and wooden staves soaked in kerosene and topped by razor wire.

By Friday morning, nine people had been wounded, according to the Erawan Medical Center. The military brought in armored vehicles, shut down power in some areas at the protest site and cut some mobile phone services.