With tensions high around the camp sporadic gunfire and explosions were heard throughout Thursday night, with sporadic clashes reported into Friday morning.
Red shirts defiant
The red shirts meanwhile remained defiant, stepping up security at the entrances to their protest camp in Bangkok's Rajprasong district.
Speaking to Al Jazeera Sean Boonpracong, a red shirt spokesman, said he believed that Thursday's shooting of Khattiya Sawasdipol, a suspended military general in charge of security at the protesters encampment, was the start of a military crackdown.
"We have been prepared for this for a long time," Boonpracong said.
Khattiya was shot in the head while speaking to a New York Times newspaper reporter close to the red shirts' camp.
Witnesses said the shooting was apparently carried out by a sniper, but it was not clear exactly who was behind the attack.
Security forces had been preparing to seal off the protest site and surround it with armoured vehicles from early on Thursday evening, saying they would allow people to leave but not enter.
The government had earlier set a deadline of midnight on Wednesday night for the protesters to disperse, threatening to off power and water supplies to the Rajprasong neighbourhood in a bid to force the protesters' hand.
But officials later said that plan had been put on hold because of the impact it would have had on residents and businesses in the area not connected with the protester.
Meanwhile, with hopes fading for a peaceful resolution to the crisis, Abhisit Vejjajiva, the Thai prime minister, suspended a plan to hold early elections in November.
"It's clear that the red shirts have only verbally accepted to join the reconciliation roadmap but have not agreed to end the protests," Korbsak Sabhavsau, the prime minster's secretary-general, told the AFP news agency.
|Troops in riot gear have been deployed around the red shirts' camp [AFP]
"Therefore it's impossible to hold elections as proposed."
The red shirts have said that they will not leave until Suthep Thaungsuban, the deputy prime minister, is charged for his alleged role in a deadly crackdown on protesters on April 10.
They have held protests since March 12 calling for the dissolution of parliament and fresh elections.
The demonstrations have often brought parts of central Bangkok to a standstill for long-periods and have included clashes with police that have left 29 people dead and more than 1,000 injured.
The red shirts initially called for immediate elections but agreed to a reconciliation deal this month in which Abhisit offered to dissolve parliament in the second half of September and hold polls on November 14.
The red shirts, mostly made up of supporters of Thaksin Shinawatra, the former prime minister ousted in a 2006 coup, have been demanding that Abhisit resign saying his government is illegitimate and came to power undemocratically following a court ruling that ousted a pro-Thaksin government.