The explosion hit at 3:28 am in front of a stage at the prime minister's Government House offices, which anti-government protesters from the People's Alliance for Democracy (PAD) have occupied since late August.

Thailand has been gripped by escalating political turmoil since May when the PAD began their protests, but there was a respite for the six-day funeral of Princess Galyani, late sister of the deeply-revered King Bhumibol Adulyadej.

The elaborate cremation ceremonies ended Wednesday evening, and within hours the blast hit at the sprawling Bangkok protest site where hundreds of people are camped out in a fortified tented city. The PAD's website said that an M-79 rocket-propelled grenade caused the blast.

Twenty-three demonstrators - 12 men and 11 women - wounded by the explosion were taken to four nearby hospitals, emergency services said.

The protesters have vowed not to leave Government House until the government elected last December - which they accuse of being corrupt and a proxy for ousted prime minister Thaksin Shinawatra - steps down.