The Thai military has imposed curfew in some parts of Bangkok as soldiers remain locked in confrontation with anti-government protesters.
At least 25 people have been killed and 215 others wounded in two days of violent unrest in the Thai capital.
"There will be a curfew announcement in some necessary areas and roads in Bangkok so that police and soldiers can differentiate people from terrorists," Colonel Sunsern Kaewkumnerd, an army spokesman, said on Sunday.
A towering column of black smoke rose over the city on Sunday as red shirt protesters, seeking the prime minister's resignation and early elections, faced off with troops and set fire to tyres serving as barricades.
The clashes in the heart of Bangkok claimed eight lives on Saturday as Abhisit Vejjajiva, the prime minister, said there was no turning back on the army's continued operations against the red shirts.
'Live fire zones'
The military has declared certain areas of Bangkok to be "live fire zones", which means security forces will use live ammunition against protesters trying to enter these areas.
Al Jazeera's Wayne Hay, reporting from Bon Kai, one of the "live fire zones", said troops were facing off with several hundred red shirts who had built barricades and blocked access to the area.
"The red shirts are lighting tires and there are large plumes of smoke ... This is definitely red shirt territory," he said.
Al Jazeera's Wayne Hay reports on the continued standoff on the streets of Bangkok
"The soldiers are firing live rounds. They're firing horizontally towards the protesters through the smoke.
"It's very difficult to see what they're firing at but at times you can see red shirts supporters dashing around across the road launching their own projectiles towards the troops."
The army has warned that it would move against the demonstrators' main rally site unless they dispersed, although it gave no timetable for any such action.
"There is a plan to crack down on Ratchaprasong if the protest does not end," Sunsern Kaewkumnerd, an army spokesman, told AFP news agency.
"But authorities will not set a deadline because without effective planning there will be more loss of life."
Abhisit, who last week overturned a plan to hold early elections, warned that the government "cannot turn back" in the two-month standoff.
He said that he was attempting to quell violence with minimum bloodshed.
Al Jazeera's Aela Callan, reporting from the main protest site, said the protesters showed no signs of giving up.
"There's a hardcore group of several thousand red shirts who are saying they won't budge," she said.
"They're really hunked in there, they've set up their homes. They've been there for a very long time.
"Some of the red shirts I have spoken to have said they're not willing to leave, they're not scared."
As soldiers opened fire on demonstrators, they responded with sporadic attacks on the army's positions, using petrol bombs to torch vehicles.
More than 50 people have been killed and 1,600 wounded since the protests began on March 12, according to figures from the emergency services and the public health ministry.
"The current situation is almost full civil war," Jatuporn Prompan, a protest leader, said.
"I am not sure how this conflict will end."
For two months, thousands of protesters have turned a large area of Bangkok into a virtual city within a city, crippling a retail and hotel district and disrupting daily life for residents in the city of 12 million people.
The rally site, where demonstrators sleep on mats on the ground and listen to speeches and music blasted from giant speakers, stretches for several square kilometres.
It is fortified with razor wire, bamboo sticks and piles of tyres.
The face-off capped weeks of political turmoil in Thailand with the red shirts - predominantly supporters of ousted prime minister Thaksin Shinawatra - converging on Bangkok to press for the current government's resignation.
Abhisit had offered to call new elections if red shirts ended their two-month protest, but the demonstrators have insisted that the country's deputy prime minister must first be charged for the deaths of 25 red shirt supporters.
The mostly poor and working-class red shirts say the government is elitist and undemocratic because it came to power in a 2008 parliamentary vote after a court ruling ousted elected allies of Thaksin.
Protest leaders have also called for the intervention of Thailand's revered King Bhumibol Adulyadej.
But the monarch, seen as a unifying force, has been hospitalised since September and has avoided commenting directly in public on the crisis.