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One person died and at least 85 were wounded in a series of explosions, reportedly caused by grenades, near a massive camp of anti-government demonstrators in Bangkok on Thursday.

The nighttime blasts occurred in the business district where the demonstrators, dubbed the Red Shirts, and soldiers have been engaged in a standoff.

Army spokesman Col. Sansern Kaewkamnerd said the blasts were caused by five grenades fired from a grenade launcher.

Thai Deputy Prime Minister Suthep Thaugsuban broadcast a statement claiming the attacks had been launched from the Red Shirt encampment, but the group has denied it caused the explosions.

"The explosions had nothing to do with us," said protest leader Weng Tojirakarn, who said the grenades could have been fired by rival protesters, the government, the army or the police.

The government announced at one point that three people had died in the explosions, but authorities later backtracked and said only one was killed.

The tense atmosphere in the Thai capital led to a confrontation between security forces and agitated protesters at a major intersection Friday.

Police and soldiers stood guard at the mouth of Silom Road, the capital's financial district, while across the intersection, Red Shirts screamed slogans and brandished sharpened bamboo staves. Morning traffic on the normally jammed road was light and fewer workers were seen headed for their offices.

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An injured Thai man is rushed to an ambulance after an explosion near a site where anti-government protesters and soldiers were facing off in Bangkok. ((David Guttenfelder/Associated Press))

Freelance reporter Michael McAuliffe said the situation on the streets of Bangkok is threatening to boil over following the explosions.

McAuliffe said street fights broke out between the demonstrators and riot police. He said people were throwing rocks and bottles at the police lines.

"I think we're probably in for a few hours of pitched fighting here between the army and the Red Shirts," he said.

"In the aftermath of the explosions, the police brought in a number of big armoured buses to try to block off the fringe of the Red Shirt camp, but right in front of it there's a highway overpass, and a lot of the Red Shirts are now moving up on to that overpass."

The Red Shirts, who are drawn from rural areas, are demanding that Prime Minister Abhisit Vejjajiva resign and for new elections to be held. They have been rallying in Bangkok for several weeks.

The Thai army has issued warnings to the protesters that it will break up the street demonstrations. The protesters are in violation of several laws, including a state of emergency.