By Monday evening, most of the remaining protesters on Bangkok's streets - said by Mr Abhisit to number no more than 20,000 - were concentrated around Government House, the prime minister said.
BBC correspondent Jonathan Head, in Bangkok, says political turmoil has disrupted life in Thailand for so long now that it is easy to forget the country was once seen as a paragon of stability.
The situation in Bangkok was fluid throughout the day, our correspondent says, with soldiers at times showing restraint, but at other times being undisciplined.
Monday is the start of a three-day holiday for the Thai New Year, and some protesters handed out pink roses to soldiers as a sign of peace.
But in a BBC interview, Mr Thaksin said: "The situation in Thailand is of very brutal suppression."
And he clarified his previous call to supporters for a revolution, saying he meant a "peaceful revolution".
"All the protesters come with bare hands, they come with peace, they are asking for a true democracy for all," he said, although he did acknowledge that some had "sticks and stones".
'They cannot riot'
Mr Abhisit, the current prime minister, declared a state of emergency on Sunday after the protests forced the cancellation of a major meeting of Asian leaders in the resort city of Pattaya.
But Army spokesperson Col Sansern Kaewkamnerd said soldiers were not firing real bullets in Monday's clashes.
"If the protesters show that they intend to hurt the officials, we will use military training rifles on them with blank bullets made from paper, which will not hurt the protesters."
Speaking to the BBC from the Middle East, Mr Thaksin accused the army of lying about the shooting in Bangkok, saying that soldiers had not fired into the air as the army said, but into crowds with live ammunition.
Earlier, Mr Abhisit said 70 people had been injured, including 23 soldiers.
Shinawatra on protests in Thailand
He added: "If the people want to demonstrate peacefully, if they want to exercise their constitutional rights they are welcome to do so, but they cannot riot, they cannot incite people to break the law, they cannot intimidate and use violence against other people."
"We will try to find the best solution we can over the next couple of days," he added.
Under the current state of emergency, gatherings of more than five people can be banned, media reports can be censored and the army can be deployed to help police maintain order.
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