At least three people died after a volley of deadly grenades exploded Thursday near a massive encampment of anti-government protesters in the centre of Bangkok, as the political standoff between the Thai government and activists grew increasingly tense.

Deputy Prime Minister Suthep Thaugsuban said Friday that three people died in the attacks and 75 others were wounded.

In an earlier statement broadcast on all Thai channels, Thaugsuban said that the attackers used a military M-79 grenade launcher.

At least five grenades were fired in the attack and reporter George McLeod told CTV News Channel it has sent waves of fear throughout the city,

"It's a very tense situation: This is right in the centre of the commercial district and there's literally pools of blood right outside coffee shops," McLeod said Thursday. "It's quite frightening for people, because they're scoping out the buildings right now and speculating whether there's more projectiles coming at them from windows."

The area where the explosions took place has been the site of a tense standoff between security forces and the self-styled Red Shirt protesters, who are demanding the resignation of Prime Minister Abhisit Vejjajiva.

In recent days, a rival group of protesters has rallied in the area, occasionally hurling stones and insults at the Red Shirts. Several of the blasts were near where the rivals have gathered, under the elevated tracks of a train station.

A Red Shirt protest leader denied the group had launched the attacks.

"The explosions had nothing to do with us," said Weng Tojirakarn, a protest leader, who suggested the blame could lie with a variety of other groups, including the rival protesters, the government, the army or the police.

Prospects for a peaceful solution to the political crisis appear slim, and every night brings a new flurry of rumors of an imminent crackdown.

But McLeod said that may be easier said than done. "The problem is there's a lot of factionalism," he said.

"The police are sympathetic with the protesters and the military is against the protesters (but) even within the military there are some who support the protesters and some who don't," said McLeod.

"There's fear that if they actually launched a full-scale crackdown it could lead to fighting within the military itself. It's a very confusing and volatile situation here. … There are rumours of coups so nobody really knows where it's going to go."

A failed April 10 attempt by security forces in Bangkok to flush protesters from their strongholds erupted into the worst rioting Thailand has seen in 18 years, with 25 people dead.

The Red Shirts, who believe Abhisit came to power illegitimately and are pushing for him to call elections immediately, have rallied in the streets for several weeks. On Thursday, the army warned that time was running out for the protesters to clear the streets, saying soldiers would crack down soon.

"To take people in Bangkok hostage is not right," army spokesman Col. Sansern Kaewkamnerd warned the Red Shirts. "Your time to leave the area is running out."

The army has issued several warnings that it will move to break up the protests if they are not ended voluntarily. They are already in violation of several laws, including a state of emergency.

The anti-Red Shirts includes office employees, middle class families, academics, some low-wage workers and members of the Yellow Shirts, a group that supports the current government and who themselves rampaged through Bangkok and seized the city's airports two years ago.

While some are genuinely aggrieved by the inconveniences wrought by the protests, many seem to have primarily political objections to the Red Shirts.

Weng accused the government of hiring the mob in order to cause trouble that could be blamed on his group.

The protesters consist mainly of poor rural supporters of former Prime Minister Thaksin Shinawatra and pro-democracy activists who opposed the military coup that ousted him in 2006 after months of demonstrations by the Yellow Shirts.

The Red Shirts believe Abhisit's government is illegitimate because it came to power under military pressure through a parliamentary vote after disputed court rulings ousted two elected pro-Thaksin governments.

Canada's Foreign Affairs Minister Lawrence Cannon has condemned the violence.

"We urge all parties to address political differences through by peaceful, transparent and democratic means, rather than turning to violence," Cannon said in a statement.

Ottawa also says non-essential travel to the Thai capital's financial district should be avoided.

With files from The Associated Press