The head of Thailand's powerful army has asked the government to dissolve parliament and call new elections.
Gen Anupong Paochinda denied the move amounted to a coup, and called on anti-government protesters to withdraw from Bangkok's international airport.
But the People's Alliance for Democracy (PAD), which took over the airport on Tuesday after months of protests, said it would not leave.
Thai Prime Minister Somchai Wongsawat is set to speak shortly, reports say.
Mr Somchai, who returned to Thailand earlier in the day from an Asia-Pacific summit in Peru, landed in the northern city of Chiang Mai.
He told reporters there that he had not yet made any decision on dissolving parliament, AFP news agency reports.
Shortly after he arrived, a man was killed in the city in a clash between pro- and anti-government supporters, police said.
Thailand has been in a state of political stalemate since former Prime Minister Thaksin Shinawatra was ousted in a military coup in 2006.
Fresh elections at the end of 2007 failed to resolve the crisis, when a party made up of former allies of Mr Thaksin returned to power.
However, Gen Anupong said the government was still in control.
"This is not a coup," he told a news conference.
"The government still has full authority. These points are the way to solve the problem which has plunged the country into a deep crisis.
"If a coup could end all the troubles, I would do it."
Earlier, the head of the PAD, Sondhi Limthongul, said his group would only agree to talks if Mr Somchai resigned.
Stranded international tourists have been evacuated from the airport.
Briton Rachel Kyte, who spent 13 hours there trying to fly to the US, said that a lack of information had raised tensions among travellers.
"People were starting to get frustrated and tired," she told the BBC .
The protesters, meanwhile, have brought in food and blankets to the airport, suggesting they have no plans to leave.
The group have also been occupying a government compound in the capital since August, claim that the government is corrupt and hostile to the monarchy.
They also accuse it of being a proxy for Mr Thaksin, who critics say is still very influential.
The PAD is a loose grouping of royalists, businessmen and the urban middle class opposed to Mr Thaksin.
Their campaign has caused massive disruption to key state institutions, including parliament.
The BBC's Jonathan Head, in Bangkok, says that the government appeared to have adopted a strategy of allowing the PAD to attack government buildings while avoiding clashes, in the hope that it could wear the protesters down.