Truckloads of soldiers and riot police have surrounded a number of monasteries in Burma's largest city, Rangoon, to try to prevent a ninth day of protests.
After more than a week of protests, the military is taking action
But groups of people are massing on the streets, apparently to prepare for more demonstrations - despite a ban on gatherings of more than five people.
In another sign of increased tensions, two key dissidents have been arrested.
Analysts fear a repeat of the violence in 1988, when troops opened fire on unarmed protestors, killing thousands.
Earlier on Wednesday, the first night of a dusk-to-dawn curfew passed peacefully in Rangoon and the northern city of Mandalay.
But as dawn broke, news emerged of the arrests of two well-known opponents of the regime: U Win Naing, a 70-year-old veteran independent politician, and Zanagar, a popular Burmese film comedian.
As the morning wore on, large numbers of soldiers with water cannon reportedly surrounded the Shwedagon pagoda, the holiest site in the city.
Armed troops have been seen deployed in other parts of the city as well, including the Sule pagoda, one of the main centres of the monks' protest marches in the past few days.
1. Shwedagon Pagoda. Tens of thousands of protesters, led by monks, gathered for the march
2.Sule Pagoda. Students joined the protest, passing by city hall
State TV has repeated warnings to Burma's people not to join the demonstrations, and to the Buddhist monks not to meddle in politics.
But monks led tens of thousands of people through Rangoon and other towns on Tuesday for an eighth day of protests, calling for democracy and an end to military repression.
Joining them were workers, actors and politicians from the opposition National League for Democracy party led by Aung San Suu Kyi, who remains under house arrest.
Some chanted "we want dialogue" while others simply shouted "democracy, democracy".
People were also carrying flags, including some bearing the image of a fighting peacock used by students during the 1988 pro-democracy uprising, witnesses say.
The young monks leading this movement have vowed to keep up their protests, but our correspondent says that now looks certain to put them on a collision course with the army.
The junta, which repressed the 1988 protests by killing some 3,000 people, finally broke its silence over the mounting protests late on Monday, saying it was ready to "take action".
15 Aug: Junta doubles fuel prices, sparking protests
5 Sept: Troops injure several monks at a protest in Pakokku
17 Sept: The junta's failure to apologise for the injuries draws fresh protests by monks
18-21 Sept: Daily marches by monks in Burmese cities gradually gather in size
22 Sept: 1,000 monks march to the home of Aung San Suu Kyi in Rangoon
23 Sept: Up to 20,000 march in Rangoon
24 Sept: New Rangoon march draws at least 50,000 and 24 other towns join in
Speaking at the UN General Assembly in New York, Secretary General Ban Ki-moon urged Burma's military to show restraint in the face of the rising tide of protests.
President Bush announced a tightening of existing US economic sanctions against the military regime there.
The US has already imposed an arms ban on Burma, a ban on all exports, a ban on new investment and a ban on financial services.
Earlier, close ally China called for stability and the EU also urged the junta to show restraint and launch a process of real political reform.
The protests were triggered by the government's decision to double the price of fuel last month, hitting people hard in the impoverished nation.
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