Buses are burnt and troops fire at protesters in Bangkok
The Thai army has fought running battles with protesters in the capital, Bangkok, in a bid to end days of mass demonstrations and political chaos.
A BBC correspondent saw soldiers fire hundreds of live rounds, some into the crowds of anti-government protesters, in a bid to clear a big road junction.
The protesters reacted by hurling petrol bombs and driving buses they had commandeered at the lines of troops.
The armed forces chief vowed to restore order using "all possible means".
But weapons would be used only for self-defence and not "excessively", Gen Songkitti Jaggabatara said on national television.
Troops were moving in on Bangkok's Government House, where tens of thousands of red-shirted protesters have based their camp.
Hundreds of soldiers were being brought in on trucks, according to reports.
A three-storey building in the country's education ministry was on fire - hit by several petrol bombs, a security guard told the AFP news agency.
Thaksin Shinawatra tells the BBC he is offering 'moral support' to protesters
Local residents in some areas of Bangkok were reported to have clashed with the protesters.
The protesters are supporters of Thaksin Shinawatra, the former prime minister who was deposed in a coup in 2006 and now lives in self-imposed exile abroad.
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.
This was demonstrated by the number of injured protesters who had been hospitalised, he said.
"The situation in Thailand is of very brutal suppression," he said.
Earlier, Prime Minister Abhisit Vejjajiva - whose resignation is the key demand of the protesters - appealed for calm and urged the demonstrators to return home.
He 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.
Monday's clashes broke out after the military moved in the early hours to clear about 200 protesters at Din Daeng intersection, about 2km (1.2 miles) from government buildings.
From Alastair Leithead in Bangkok
The military finally moved on to the streets of the capital with force. They pushed into the city before daylight to take a road intersection.
For hours there were bursts of skirmishes between the protesters and the military who held their line with riot shields and automatic weapons.
Petrol bombs and rocks were thrown but the military did not act as the stand off continued.
Suddenly though, after a bus was set on fire, the troops moved in using water cannons to put out the flames and then opening fire with live rounds.
Some shot above the protesters heads, we watched as others clearly fired into the crowds.
We saw only one person injured, but there were reports of more casualties.
There were hours of skirmishes as demonstrators threw petrol bombs and rocks at lines of troops, who were carrying riot shields and automatic weapons, reports the BBC's Alastair Leithead from the scene.
The soldiers did not break their line until a bus, one of several commandeered by the protesters, was set alight.
They then moved in with water cannon to put out the flames, before opening fire with live rounds.
Many soldiers shot above the protesters' heads, but some were clearly firing into the crowd, our correspondent says.
A second round of firing erupted at the nearby Victory Monument landmark after a bus was driven towards the military, before crashing into a motorway barrier.
The prime minister said 70 people had been injured, including 23 soldiers.
Monday is the start of a three-day holiday for the Thai New Year.
One of the protest leaders accused the army of using excessive force against the protesters.
"We will stand firm indefinitely," Jakrapob Penkair told BBC World Service.
The government has carefully mapped out a plan to implement the law
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