Tensions are high in the Thai capital Bangkok after a night of minor clashes, helicopter fly-overs and fireworks.
A military spokesman has warned of “decisive action” and “chaos”, urging protesters to leave their extensive, fortified camp in the city.
Protests have also escalated in the north of the country, where a train carrying military vehicles was blocked.
The government is under pressure to crack down on the red-shirt protesters, who say they want new elections.
Prime Minister Abhisit Vejjajiva and armed forces commander-in-chief Anupong Paojinda have both said they want a negotiated, non-violent end to the destabilising protests, now in their sixth week.
But few observers are confident a non-violent end can be found to the increasingly militarised standoff.
Army spokesman Colonel Sunsern Kaewkumnerd warned that the protesters’ time to move out was “running out”.
“If there is a crack down, innocent people might get hurt,” he said. “If we move in, we will attempt to arrest the leaders.”
“The government will be very decisive but in the beginning of the operation there may be chaos.”