On stage, in front of a sign reading "Fight for Thailand, Fight For Our King", speakers led the crowd in condemning Thaksin and his followers as "People who sell the country".
Prestige at stake
"Our duty is to protect and preserve the country's honour and dignity and the monarchy. Cambodia violated the extradition treaty and allowed a convicted person to be its adviser," Somsak Kosaisuk, a senior PAD leader, said.
"This action harms our country's prestige. We will denounce both convicted Thaksin and Hun Sen [Cambodia's prime minister] at the protest."
|Several people were hurt in an explosion at Sunday's rally in central Bangkok [EPA]
The PAD had led mass anti-Thaksin protests before he was toppled in a 2006 military coup, and blockaded Bangkok's airports in late 2008 to force his allies out of government.
Meanwhile, the Thai police said they were investigating a blast which injured a dozen people including two children at the Sanam Luang parade ground near the area where about 20,000 people had gathered on Sunday.
According to the protest organisers, the small explosion was caused by a firecracker thrown by two men on a motorcycle, but police said on Monday that the cause was still not clear.
Thaksin's visit to Cambodia has sparked a diplomatic crisis between Bangkok and Phnom Penh, with relations already tense after a series of deadly clashes in the past year over disputed land around an ancient temple on the border.
Thaksin's comments on the Thai monarchy have also proved sensitive because King Bhumibol Adulyadej, 81 has been in hospital for the past two months. He is seen as a major force for stability in the politically divided nation.
The two governments recalled their respective ambassadors and expelled the first secretaries of each other's embassies on Friday.
Cambodian police have also charged a Thai man with spying for the Thai embassy.
Early last week, the Thai government announced the cancellation of an oil and gas exploration deal agreed with Cambodia when Thaksin was prime minister.
"To identify yourself with Hun Sen is a terrible political mistake"
Chris Baker, political analyst and author of Thaksin's biography
Two road construction projects with Cambodia involving loans of more than $42 million to Phnom Penh were ordered to be reviewed.
Thaksin, who has been in self-imposed exile since the 2006 coup, returned home briefly last year but fled before being found guilty and was sentenced in absentia to two years in jail for corruption.
Thai authorities have also frozen $2.2bn worth of the assets owned by Thaksin, who remains popular in the Thai political scene especially among the rural poor.
His red-shirted supporters have themselves staged several massive protests over the past year, including the disruption of a summit of Southeast Asian leaders and subsequent riots in April.
But analysts warned that by siding with Cambodia Thaksin could lose public support.
"To identify yourself with Hun Sen is a terrible political mistake," said Chris Baker, a Bangkok-based political analyst who authored a biography of Thaksin.