Thai prime minister Samak Sundaravej said today he planned to hold a national referendum to end a street campaign against his rule that has paralysed the country.
Mr Samak issued the state of emergency on Tuesday after one person was killed and 45 were injured during clashes.
Today, he called for a national referendum to end the crisis, which has become a major distraction for his government.
Thousands of protesters have set up camp on the Government House compound in Bangkok, but despite the emergency decree by Mr Samak, the army has refused to step in to forcibly remove them for fear of exacerbating the situation.
A gunman on a motorcycle fired shots at a group of Thai students marching to protest in front of the home of Prime Minister Samak Sundaravej, wounding two of them, police said.
About 100 students were going to the house when the gunman drove by and fired, hitting one student in the thigh and another in the elbow.
The White House said today that Thailand's government should limit the state of emergency imposed to try to end clashes with its political opponents who have been seeking to oust Prime Minister Samak Sundaravej.
"We hope the Thai government will be able to limit the duration, and extent to which it implements the emergency decree, to the extent necessary to restore the authority of Thailand's democratically elected government," White House spokesman Gordon Johndroe said.
"We urge both supporters and opponents of the Thai government to refrain from violence, respect the rule of law and address their differences within Thailand's democratic institutions," the White House spokesman said.
Mr Samak said the national referendum could be held within 30 days of the Senate approving a referendum law that is pending before it.
"I would like to urge the Senate to spend only three days to pass this referendum law," Mr Samak said in a radio broadcast. "The campaign will last for a month in which both sides can do whatever electioneering they want."
Earlier today he rejected calls for his resignation, saying he would not "jump ship" in the face of a three-month-old street campaign to unseat him.
Mr Samak had dismissed speculation that he would call a snap election to defuse the protests, which have dragged on despite Tuesday's declaration of emergency rule in Bangkok.
The anti-government People's Alliance for Democracy (PAD), barricaded inside the prime minister's official compound in Bangkok for a tenth day, vowed to stay until Mr Samak quit.
"As long as he insists on staying on, we will not go anywhere. It doesn't matter how many days or years, or even into the next life," PAD leader Sondhi Limthongkul told a crowd of cheering supporters.
The PAD, a coalition of businessmen, activists and academics, accuses Mr Samak of being an illegitimate proxy of former prime minister Thaksin Shinawatra, who was ousted in a 2006 coup and now lives in exile in London.
Mr Samak confirmed the resignation of foreign minister Tej Bunnag yesterday and suggested the career diplomat with close ties to the palace had felt pressure to quit.
Mr Samak said it was time for Thais to choose sides. "I will not jump ship, I will be in control. The rest of the country must decide if they will join them," he said.
Mr Samak declared emergency rule after clashes between his supporters and anti-government protesters killed one man and injured 45, but the army has refused to use force to evict the protesters, saying it would only make the situation worse.
Reuters