The campaign of civil disobedience by both the establishment Yellow Shirts and the anti-establishment Red Shirts in Thailand has gone from outlandish to outrageous, whether it is the dumping of sewage or the use of liquefied petroleum gas tanks as mobile bombs, the spilling of HIV-tainted blood or the crippling of economic installations such as airports and glitzy shopping complexes.

The Red Shirts Monday chose not to confront fully armed troops sent in by the hundreds to fortify the Silom area in the Thai capital, the city's business heartland. The Silom district is home to multinational corporations and bank headquarters including Bangkok Bank, which the Red Shirts are targeting for its links to the army.

Now the Yellow Shirts – the royalist People's Alliance for Democracy – are threatening to come back to the streets as well. Chamlong Srimuang, the ascetic onetime Bangkok mayor who led protests against the 1991 coup, said he would give the government seven days to get the situation under control "or we, every member of the PAD, will perform our duty under the constitution. Prepare yourselves for the biggest rally when we will eat and sleep on the street again."

Certainly, since the April 10 clashes that left 25 people dead including six soldiers and over 800 injured, the gloves have clearly come off. The army is in no mood to use international standards of crowd control. Gone are the batons and shields. The army has given the troops the green light to carry live rounds in "self-defense"

No one is feeling safe. Overnight, Bangkok, a haven for international tourists and Asean's reliable partner, has now become its problem child, in the words of its Foreign Minister Kasit Piromya.

At a Washington seminar last week, Kasit, who according to sources present say spoke largely off-the-cuff and with cameras present in the room, not only opened the taboo subject of the monarchy and reforming it to be more politically involved with the rural poor and be more like Britain and Netherlands, he also accused the deposed and self-exiled premier Thaksin Shinawatra of being a "bloody terrorist" in the same league as Hitler, Stalin and Mussolini.

Thaksin is threatening to sue Kasit for libel.

The atmosphere is so charged that some Yellow Shirts, largely royal defenders who instigated civil disobedience through the daring takeover of city's airports in 2008, refuse to ride in taxis driven largely by the city's Red Shirt sympathizers.

Many Thais weary of the propaganda war have stopped watching television. The witch-hunts are so severe that very young children of prominent politicians are assigned heavy security details. Sirichok Sopha, an aide to Prime Minister Abhisit Vejajjiva, could not buy street food without being chased out by the vendor, a Thaksin supporter.

"We've become a society of roving death squads," said one Bangkok resident firmly in the yellow camp. This resident, who declined to be named, noted that "Thai people can turn violent rather quickly" but he is still all for the army to enforce the emergency laws because "a lot of people try to live within the law and tell their children to live within the law."

It is a sentiment shared by small businesses, the hardest hit by the Red Shirts' occupation of the Ratchaprasong shopping belt. They are struggling to meet rental payments that landlords still demand for the retail space. Many shops in the intersection remain shut.

Another Bangkokian in the red camp wondered out loud if the army would shoot Thaksin dead as the Philippine army did Benigno "Ninoy" Aquino in 1983 should the Red Shirt icon surface in Northeast Udon Thani, his stronghold, amid the turmoil.

With no compromise in sight, it is believed that a heavyweight Thai intermediary, Senator and General Lertrad Rattanawanich, who chaired last year's subcommittee for constitutional amendments, is trying to get the parties to talk again. Diplomats say Senator Lertrad was Thaksin's pick as Commander-in-Chief in 2005 but was pressured by the army into picking Sonthi Boonyaratkalin.

It is not clear if the anti-Thaksin camp find Lertrad an acceptable interlocutor.

Mediators, including the respected peace activist Gothom Arya, abound. But as one diplomat put it, "there will be no mediation until the parties are willing to sit down. (Richard) Holbrooke could not have succeeded with the Dayton Peace Accords if all sides didn't want to come together."

Another source says if the two sides do sit and talk now, it would be to for "image preservation and not results." So it is with a mixture of intrigue, suspicion and hope that many Thais watched former Prime Ministers General Chavalit Yongchaiyudh and Somchai Wongsawat appear before the Thai press to call for kingly intervention to end the escalating crisis. They are the spiritual leaders of Red Shirt movement.

A diplomat noted the two are "(forcing) the issue" and wish to "go directly to the source" believing Prime Minister Abhisit Vejajjiva is not clinging on to his post voluntarily. The leaders, along with Thaksin, have continued to press Abhisit to dissolve parliament and call immediate snap elections.

The government, observers say, is also playing the royalist card by branding the opposition as Republicans and terrorists out to subvert the state.

Abhisit, meanwhile, broke his unusual reticence by granting state-controlled NBT television his first local media interview Monday. When pressed about how the government plans to end the escalating standoff, he did not set a timeline.

Various diplomats say the government is now keeping their cards close for fear of leaks to the other side or "they have no ideas" as to what to do given the size and nimbleness of the Red Shirts.

The Red Shirts erected a pavilion at their key Ratchaprasong protest site by unfurling a large net-like cover to shelter the crowds from the heat, debris and other objects that could easily rain down from the nearby buildings.

Haseenah Koyakutty is a freelance Southeast Asia Correspondent based in Bangkok.