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UPDATE 2-Thai activists reject peace talks offer

By Boontiwa Wichakul BANGKOK, March 21 (Reuters) - Opposition activists in Thailand rejected a government offer for dialogue on Sunday after Prime Minister Abhisit Vejjajiva ruled out dissolving parliament and assigned a junior minister to attend the talks. Red-shirted supporters of ousted former premier Thaksin Shinawatra, who rallied for an eighth day on Sunday, insisted they had not closed the door but would talk only with Abhisit and on the condition that house dissolution was on the agenda. Abhisit earlier said Education Minister Chinnaworn Boonyakiat would represent the government at Monday's talks, which irked the opposition, who have vowed to protest in Bangkok for at least two more weeks, with reinforcements coming in from the provinces. "We will talk with the prime minister only," one of the protest leaders, Jatuporn Prompan told reporters. "No one will meet with Chinnaworn." The protests have so far been peaceful, which helped lift Thai stocks to a 20-month high last week, with foreigners continuing to pour money into the bourse, attracted by some of the cheapest valuations and best dividend yields in Asia. About 30,000 "red shirts" remained at their encampment in Bangkok's historic heart, a day after at least twice that number fanned out across the city on motorcycles and pickup trucks to drum up support for their campaign. Abhisit has refused to bow to pressure to dissolve parliament, insisting the country is too divided to face an election. Analysts said the talks would be futile because neither side had anything to bring to the table. Abhisit said the government was willing to listen to the "red shirts'" grievances but immediate house dissolution was not an option. "Everyone from the coalition parties agree that the government will not dissolve the house," Abhisit said in a televised news conference. "We should not go into too much detail, but we will probably discuss broad principles such as the right timing for house dissolution, and how," he said in an earlier address. But analysts said the stakes were too high for both sides and talks were unlikely to produce any compromise. "There's nothing to talk about," said Somjai Phagaphasvivat, a political scientist at Bangkok's Thammasat University. "The minimum the 'red shirts' will accept is house dissolution and the government will not yield to that. The root cause of the problem will not be addressed and talks will just pave the way for more protests and upheaval in future." GOVT SEEN UNLIKELY TO FALL Investors and most analysts believe Abhisit's government is unlikely to fall as it has the backing of the military and wealthy establishment elites, accused by the "red shirts" of meddling in politics and undermining democracy. Somjai said the premier's likely tactic was to wait for the protesters, many of whom are from rural areas, to become tired, frustrated and disheartened, and run out of steam. "Abhisit is holding all the cards," he added. "He knows this can't go on for months." The lack of violence and stability of a government that has put Southeast Asia's second largest economy on course for recovery has reduced short-term risk concerns. But investors remain hesitant about long-term expansion in a country beset by deep social rifts. Much of the divisiveness centres on Thaksin, the assumed leader and financier of the movement, who is loved by Thais as much as he is loathed. Overthrown in a 2006 coup and sentenced in absentia to two years in prison for graft, the twice-elected Thaksin is fighting to return from self-imposed exile and wrestle back de facto political power through his allies in the opposition party. Security was stepped up late on Saturday after two attacks on what the authorities said were symbolic targets. It was not known who was behind the attacks and protesters denied responsibility. A grenade exploded in the compound of the Defence Ministry, close to the protest site, slightly wounding two people, while an explosive device was hurled at the headquarters of the National Anti-Corruption Commission in Nonthaburi, near Bangkok. Protest leaders were planning to raise the intensity of their rally on Monday and Tuesday. They might seek to make Abhisit's job impossible by following him and blocking his every move. The premier is avoiding his office, parliament and his home for security reasons and has based himself at a heavily fortified military compound, travelling around the city by helicopter. (Additional reporting by Khettiya Jittapong and Ambika Ahuja; Writing and additional reporting by Martin Petty; Editing by Jeremy Laurence) Keywords: THAILAND POLITICS/ (Bangkok Newsroom; +66 2 637 5610) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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