They sat on the main road running alongside the large Government House compound under the watchful eyes of riot police, but there were no immediate signs of violence after a march from an overnight rally.
However, Thaksin Shinawatra, the prime minister, who is accused of corruption and abuse of power by an extra-parliamentary coalition trying to remove him, said he would declare a state of emergency if things got out of hand, a move which could put troops on the streets.
Fears of violence in a country with a history of coups have been rife since the anti-Thaksin campaign broke out in late January after the tax-free $1.9 billion sale of the business empire he founded.
Chidchai Vanasatidya, the deputy prime minister in charge of national security, said that although an emergency could be declared, there were no plans to do so.
Military chiefs have said over the past few weeks that they have no intention of intervening and that the era of coups is over.
The overnight rally was the latest in a series and the plan to march to Government House prompted an indirect appeal from King Bhumibol Adulyadej not to allow the protest to descend into violence.
Chamlong Srimuang, the ascetic general who led a 1992 "people power" uprising against a military government in which about 50 people were killed, said there would be no trouble this time.
Thaksin Shinawatra has been
urged to resign as prime minister
"We will march peacefully," he told the rally, to chants of 'Thaksin, get out'. "You can be assured that nothing will happen. Do not be afraid."
The crowd appeared to be well disciplined.
When some people tried to tear down a long banner pinned to the wall of Government House bearing messages of support for Thaksin, marshals in the crowd moved swiftly to stop them.
Chamlong's blue-clad "Dharma Army", or the Army of Buddha's Teachings - barefoot and carrying the red, white and blue Thai flag - led the way from the overnight rally to Government House about 5km (3 miles) away.
Protest leaders had hoped the crowd outside the heart of government would prevent the weekly cabinet meeting. But it went ahead, with Thaksin leading it by video-link.
He was campaigning in the northeast for a snap election he called for 2 April in the hope of defusing the campaign to topple him, saying he would not be forced out by "mob rule" and accusing opposition parties of betraying democracy by boycotting it.