"We see the government as ultimately illegitimate and illegal ... in other words the rule of law is now put in doubt and in question, so people must decide by themselves how to proceed with this."
The emergency decree bans gatherings of more than five people and forbids news reports that the government considers threatening to public order.
It also allows the government to call up military troops to quell unrest.
But bands of anti-government protesters, wearing red shirts, roamed parts of Bangkok and commandeered public buses in an attempt to block several major roads.
Tanks on streets
Abhisit declared the state of emergency in a televised speech.
"The government has tried all along to avoid violence but the protest has developed and they have used actions incompatible with the constitution," he said.
"Now the government is unable to avoid this state of emergency."
Soon afterwards, television reports said that about 50 protesters stormed into the interior ministry while Abhisit was in the building, but the prime minister escaped by car.
The Reuters news agency reported that soldiers initially made no effort to stop the protesters from entering the building, but later fired into the air to deter others from joining them.
Anti-government protesters gathered at the capital's police headquarters on Sunday.
Another crowd of demonstrators swarmed around Government House, the prime minister's office.
"Tensions are now running very high," Tony Cheng, Al Jazeera's correspondent, said from the capital.
"There are now tanks on the streets of Bangkok," he said.
Major-General Suporn Phansua, a spokesman for the Bangkok Metropolitan Police said, that the protests have spread to many parts of the city.
"Protesters have seized tanks and armoured cars," he said.
Sathit Wongnogntoey, a minister in the prime minister's office, said the government had blocked broadcasts from the protesters' radio station in accordance with the emergency decree.
Earlier, police arrested Arisman Pongruengrong, who spearheaded Saturday's demonstrations in Pattaya.
Anti-government protesters broke into the summit venue of a meeting of the Association of Southeast Asian Nations (Asean), on Saturday.
Asean leaders were airlifted from the summit venue after protesters breached police lines outside the building.
"Yesterday was a truly shameful day for our country, which had its international image destroyed by the siege of the Asean venue in Pattaya"
Bangkok Post editorial
The abandoned summit - the biggest international gathering since the G20 summit in London earlier this month - grouped the Asean nations with China, Japan, South Korea, India, Australia and New Zealand.
The collapse of the summit puts more pressure on Abhisit, who has pledged that his four-month-old government will heal years of political turmoil since Thaksin Shinawatra, a former prime minister, was ousted in a 2006 coup.
"Yesterday was a truly shameful day for our country, which had its international image destroyed by the siege of the Asean venue in Pattaya and the embarrassing postponement of the forum," the Bangkok Post newspaper said in a front-page editorial on Sunday.
Thaksin's supporters say Abhisit, whose coalition government came to power four months ago, became prime minister illegitimately after a parliamentary stitch-up engineered by the army.
Four prime ministers in the last 15 months have failed to resolve Thailand's deep political rift which pits the military and business elite against a rural majority loyal to Thaksin.