BANGKOK (AP) — Thai protesters said Tuesday that they would fortify their sprawling encampment in Bangkok's upscale hotel-and-shopping district before venturing out to "wage a big war" to topple the government they decry as illegitimate.

Soldiers in full combat gear guarded other nearby sections of the capital in an increasingly tense standoff that has shuttered 5-star hotels and glitzy shopping malls and threatens to damage Thailand's sunny image as a tourist paradise.

Key protest leader Nattawut Saikua canceled a rally that had been planned for Tuesday. He said that thousands of protesters were instead shoring up their defenses and setting up new checkpoints in the areas they now occupy.

The "Red Shirt" protesters — who are demanding that Prime Minister Abhisit Vejjajiva call early elections — have been occupying the tony Rajprasong district for more than a month and now are camping in nearby main roads covering several city blocks.

Red Shirt security details are manning checkpoints fortified by barbed wire, controlling traffic into and out of the protest zone.

Security forces moved into nearby Silom Road on Monday to deter any Red Shirt incursion into the central business district, where several major banks and corporations have their headquarters.

The standoff in Bangkok has cost merchants tens of millions of dollars.

One hotel inside the protest zone, the Holiday Inn, closed its doors Tuesday while the neighboring InterContinental told all remaining guest to check out. Both said they would reopen next Monday. Other hotels across Bangkok reported dramatic drops in occupancy rates.

Nattawut had promised a large rally Tuesday at an unnamed location, but later said the protesters would first work to prevent soldiers from clearing them out of their camps.

"We will fortify our rally campground to ward off any invasion before we go out to wage a big war," he said. Nattawut said that once troops move out of the nearby Silom Road, the Red Shirts would stage a march down that road to boost morale of people working along the avenue.

Nattawut also indicated that the demonstrators were open to negotiations to end 40 days of confrontations and chaos in the city, which

"Our group is always open to outsider suggestions. Whatever group wants to propose a solution to the crisis, we're happy to hear these solutions," Nattawut said.

Abhisit — speaking on government-run television channels Monday night — said he would not set a date for protesters to be forced out of their encampment.

The Red Shirt protesters, formally known as the United Front for Democracy against Dictatorship, initially were camped in a historic district of Bangkok. A failed April 10 attempt by security forces to flush protesters from that neighborhood erupted into the worst political violence Thailand has seen in 18 years, leaving 25 dead and more than 800 wounded.

The protesters consist mainly of poor rural supporters of former Prime Minister Thaksin Shinawatra and pro-democracy activists who opposed the military coup that ousted him in 2006.

They believe Abhisit's government is illegitimate because it came to power through a parliamentary vote after disputed court rulings ousted two elected, pro-Thaksin administrations. The conflict has been characterized by some as class warfare, pitting the country's vast rural poor against an elite that has traditionally held power.

Armed troops initially moved before dawn Monday to block entry to Silom Road, patrolling some of the city's most famous bar strips just off the main street. The Red Shirts said the authorities were preparing a "killing field" in the area and began stockpiling paving stones, sharpened bamboo staves and other crude weapons.

After a tense face-off early Monday, the troops pulled back almost halfway down the road's 1.5-mile (2.5-kilometer) length to protect a key target of the protesters, the headquarters of the Bangkok Bank, which was barricaded by razor wire. The Red Shirts claim Bangkok Bank has close ties to the government, and have protested in front of the building previously on a smaller scale.

During the earlier street battles, the military lost a senior officer and suffered scores of other casualties among its troops, who were mostly equipped for riot control rather than lethal combat. The majority of the dead, however, were civilians.

The government accused "terrorists" armed with guns and other weapons of orchestrating the earlier violence and says weapons were stolen from the military that have not been returned.

The virtual occupation of key areas of Bangkok by the Red Shirts has hit Thailand's lucrative tourist industry hard.


Associated Press writers Jocelyn Gecker, Grant Peck and Denis D. Gray contributed to this report.