Thailand's army declared martial law nationwide on Tuesday to restore order after six months of street protests that have left the country without a proper functioning government, but denied that it was staging a military coup.

While troops patrolled the streets of Bangkok, the caretaker government led by supporters of self-exiled former premier Thaksin Shinawatra was still in office, military and government officials said. Ministers were not informed of the army's plans before the surprise announcement on television at 3 am.

Army chief General Prayuth Chan-ocha said the military was taking charge of public security because of violent protests that had claimed lives and caused damage. Nearly 30 people have been killed since the protests began in November last year.

"We are concerned this violence could harm the country's security in general. Then, in order to restore law and order to the country, we have declared martial law," Prayuth said.

"I'm asking all those activist groups to stop all activities and cooperate with us in seeking a way out of this crisis."

Prayuth had invited government leaders to a meeting at 2 pm, an army spokesman said.

Acting Prime Minister Niwatthamrong Boonsongphaisan on Monday ruled out resigning as a way out of the crisis that is stunting economic growth, as the anti-government protesters stepped up their pressure to remove him and install a new administration.

Both pro- and anti-government protesters are camped out at different places in Bangkok and the army ordered them to remain where they were and not march anywhere to prevent clashes.

The army also called on media not to broadcast material that would affect national security.

The caretaker government, wary of the army given its past interventions on the side of the establishment, welcomed the move to restore order. It said it had not been informed about martial law in advance but it was still running the country.

"The government doesn't have a problem with this and can govern the country as normal," caretaker Justice Minister Chaikasem Nitisiri, told Reuters.

Thailand has been stuck in political limbo since Prime Minister Yingluck Shinawatra, Thaksin's younger sister, and nine of her ministers were dismissed on May 7 after a court found them guilty of abuse of power. An acting prime minister has since taken over.

The crisis, the latest instalment of a near-decade-long power struggle between former telecoms tycoon Thaksin and the royalist establishment, has brought the country to the brink of recession.

The military, which put down a pro-Thaksin protest movement in 2010, has staged numerous coups since Thailand became a constitutional monarchy in 1932. The last one was in 2006 to oust Thaksin, a billionaire who has lived in self-exile since 2008 but commands huge support among the poor.

The US, which cut aid to its military ally after the 2006 coup, said it was monitoring the situation in Thailand closely.

"We expect the army to honour its commitment to make this a temporary action to prevent violence, and to not undermine democratic institutions," said US State Department spokeswoman Jen Psaki in a statement.

Army chief Prayuth had warned last week, after three people were killed in a gun and grenade attack on anti-government protesters in Bangkok, that troops might have to be used to restore order if the violence continued.

The baht fell against the dollar in early trade but steadied later and dealers suspected that was due to intervention by the central bank.
At 0346 GMT the baht was quoted at 32.48/50 per dollar after earlier trading at a low of around 32.64.

The stock market fell around 1 percent. - Reuters