Thousands of anti-government protesters rallied in central Bangkok on Sunday, the start of what they call the "final battle" in a five-month street campaign to oust the administration, Reuters reported.
"I fear nothing. We will not bow our heads to the dark power destroying our country," said Cat, a 48-year-old businesswoman, among the thousands of protesters waving placards and shouting "fight, fight" inside the Government House compound they have occupied since late August.
The crowd led by the People's Alliance for Democracy (PAD) planned to march to parliament early on Monday, where scores of police were already erecting barricades and moving trucks armed with water cannons into position.
A similar protest in October left two people dead and hundreds wounded, including scores of police, when police fired tear gas to break up the rally aimed at disrupting parliament.
Prime Minister Somchai Wongsawat, who is attending an Asia-Pacific summit in Peru, assigned army chief Anupong Paochinda to monitor the protests and give advice to police.
Major bloodshed would raise the chances of a military coup only two years after the army's removal of former prime minister Thaksin Shinawatra. But Anupong has said a putsch would do nothing to resolve Thailand's fundamental political rifts.
The PAD enjoy the backing of Bangkok's urban middle classes and elite, including Queen Sirikit, while Thaksin and the government claim their support from the rural voters that returned a pro-Thaksin party in a December election.
The PAD is calling the march "its final battle" to oust the government, which it blames for a grenade attack last week that killed one person and wounded 23. Another grenade blast near their protest site wounded eight PAD security guards on Saturday.
Somchai has denied the government or its supporters are behind the blasts. Police have made no arrests so far.
On the outskirts of Bangkok, thousands of red-shirted government supporters rallied in a Buddhist temple on Sunday to show their support for Somchai.
"There will be no clashes. After our programme ends, we will go home," Jatuporn Prompan, a leader of the United Front of Democracy against Dictatorship (UDD), told a Thai TV station.
He said the group would not march on parliament on Monday to confront the PAD.
Raising the pressure on Somchai, public sector unions have called a nationwide strike for Tuesday unless he stands aside, a threat that, if carried out, would deepen the economic impact of a political crisis now in its fourth year.
Government decision-making has ground to a halt, intensifying fears about the export-driven economy's ability to withstand a global recession. Some foreign firms are already cutting back on production and jobs in Thailand.
Japanese camera maker Nikon laid off 1,500 staff at its Thai plants, the Bangkok Post reported on Saturday.
Last week, U.S. car giant General Motors announced a two-month shutdown at its Thai plant, and Toyota said it planned production cuts in Thailand.
House leaders have vowed to press ahead with Monday's parliamentary session, which will debate legislation relating to next month's regional summit in the northern city of Chiang Mai.
They have refused to move the session to a new venue, setting up a potentially serious confrontation.
Even if Monday passes off without incident, tensions are likely to remain high with Thaksin -- now in exile having skipped bail in a corruption case -- set to address a mass rally of supporters around December 13.