Thai soldiers would not use force to evict protesters occupying the prime minister's office, army chief Anupong Paochinda said on Tuesday, despite a state of emergency giving him the power to do so.
Thai Prime Minister Samak Sundaravej declared a state of emergency in Bangkok on Tuesday and gave the army control of public order after a man died in overnight clashes between pro- and anti-government protesters.
Leaders of the anti-government protest movement that has occupied Mr Samak's official compound for the past week said they would not be moving. They are camped out behind makeshift barricades of razor wire and car tyres.
"If we thought we could use police and soldiers to get them out with a peaceful conclusion, we would do it, said army chief Anupong Paochinda. "But we think that that would create more problems."
The emergency powers invoked by Prime Minister Samak Sundaravej banned public meetings, declared government buildings off limits, and restricted media reports that incite unrest.
The state of emergency is the culmination of more than 100 days of street protests by an anti-government group which accuses Samak of being an illegitimate proxy of former Prime Minister Thaksin Shinawatra, now living in exile in London after skipping bail on graft charges last month.
But with the army reluctant to enforce the emergency decree the stand-off looked set to drag on.
General Anupong, one of the generals who ousted Mr Thaksin only to see his allies return to power in December's general election, said another putsch would solve nothing.
"The door to use force is closed. We must find a solution through the legal and parliamentary systems," he said.
Some schools and shops were shut, but there was no major troop presence or curfew to interrupt daily life in the sprawling city of 10 million people.
Bangkok airport, the main gateway for millions of tourists visiting one of Asia's top holiday destinations, remained open.
But airlines halted flights to the southern commercial capital of Hat Yai after protesters marched on the airport.
Tourism, a major employer, was expected to take a hit as Australia, South Korea and Singapore issued travel warnings, with others likely to follow. National carrier Thai Airways said its bookings were down more than 10% in recent days.