A series of explosions in the Thai capital Bangkok is reported to have killed at least three people and injured scores more.
Deputy Prime Minister Suthep Thaugsuban said grenades had been fired from a camp of anti-government protesters.
The explosions followed rising tensions in the stand-off between police and opposition demonstrators in the city.
Thai Prime Minister Abhisit Vejjajiva has called an emergency meeting with security chiefs, officials said.
Mr Suthep said three people had been killed and more than 70 wounded in the explosions. Hospitals in Bangkok had only confirmed one person killed.
He said at least one M-79 grenade launcher had been used in the attacks, adding: "It was clear that it was shot from behind the King Rama VI Monument where the red-shirts are rallying."
However, red-shirt leaders denied that their supporters were responsible for the blasts.
Television images showed a chaotic scene with ambulances streaming into the area and panicked residents helping to carry the injured to safety. Blood was splattered across pavements and office windows were smashed.
Reports said two foreigners were believed to be among the injured.
Army spokesman Col Sansern Kaewkamnerd said five grenades had been fired. Three fell through the roof of the Saladaeng Skytrain station, along Silom Road, the centre of Bangkok's business district, he said.
A fourth exploded on the pavement near the five-star Dusit Thani Hotel and the fifth near a bank, he added.
He said the same type of grenade - fired from a shoulder-mounted launcher - had hit troops during bloody clashes with protesters that killed 25 people on 10 April.
The explosions happened near an intersection where troops are facing barricades manned by anti-government red-shirt protesters.
Their base has been fortified in recent days with sharpened bamboo stakes and piles of car tyres.
The red-shirts - who are calling for fresh elections - have been camped out in the city for six weeks.
The volatile atmosphere has recently been heightened by pro-government protesters, waving Thai flags and hurling abuse and water bottles at the red-shirts.
The BBC's Alastair Leithead, who is at the scene, says a group of a dozen or so people have walked through police lines and started throwing bottles and stones towards barricades manned by red-shirt protesters.
The reds are firing fireworks into the air and police are watching, doing nothing to stop them, he says.
The government is under pressure to crack down on the protesters.
Thai leaders have said they want a negotiated, peaceful end to the dispute, but observers say a non-violent solution is increasingly unlikely.
Both the US and the UN urged all sides to exercise restraint.
"We appeal to the protesters and Thai authorities to avoid further violence and loss of life and to work to resolve the situation peacefully through dialogue," said UN spokesman Martin Nesirky.
The BBC's Rachel Harvey in Bangkok says there has been a series of unexplained grenade attacks in Bangkok in recent weeks, coinciding with the anti-government demonstration - although protest leaders deny any involvement.
Earlier, Col Sunsern warned that the protesters' time to move out was "running out".
"If there is a crackdown, 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."
Red-shirts
Formally called the United Front for Democracy Against Dictatorship (UDD)
Mostly poorer workers from rural areas
Many are loyal to ousted PM Thaksin Shinawatra
Believe Mr Abhisit came to power illegally and want him to resign and call elections
Yellow-shirts
Known as the Peoples' Alliance for Democracy
Loose coalition of mostly urban middle-class royalists and businessmen
United by their hatred of Mr Thaksin who was ousted in 2006
Occupied airports and official buildings in 2008, precipitating a political crisis
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