Thailand's army chief General Prayuth Chan-ocha seized control of the government in a coup, two days after he declared martial law, claiming the military must restore order and push through reforms after six months of turmoil.

The military declared a 10pm-5am curfew, suspended the constitution and told outgoing cabinet ministers to report to an army base by the end of the day. Rival protest camps were ordered to disperse.

Thailand is locked in a power struggle between supporters of ousted former premier Thaksin Shinawatra and opponents backed by the royalist establishment that has polarised the country and battered its economy.

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"In order for the situation to return to normal quickly and for society to love and be at peace again ... and to reform the political, economic and social structure, the military needs to take control of power," Prayuth said.

The general made his broadcast after a meeting to which he had summoned the rival factions in Thailand's drawn-out political conflict, with the aim of finding a compromise to end six months of anti-government protests.

But no progress was made and Prayuth wound up the gathering by announcing he was seizing power.

Hundreds of soldiers surrounded the meeting at Bangkok's Army Club before the coup announcement and troops took away Suthep Thaugsuban, leader of the protests against the government.

The army ordered rival protest camps to break up and soldiers fired into the air to disperse thousands of pro-government "red shirt" activists gathered in Bangkok's western outskirts. The military detained at least one leader of the activists.

Their leader, Jatuporn Prompan, said they would continue their rally.

The army had declared martial law on Tuesday, saying the move was necessary to prevent violence.

"Martial law may have been to test the waters, the army gave the opposing camps a chance to negotiate a way out but the endgame was always the military taking over," said Kan Yuanyong of the Siam Intelligence Unit think-tank.

"The possibility of conflict is now much higher," he said. "Thaksin will fight back."

Thaksin has lived in self-exile since 2008 to avoid jail, but still exerts a huge influence, most recently through a government run by his sister, Yingluck Shinawatra.

In a first round of talks, Prayuth called on the two sides to agree on a compromise that would have hinged around the appointment of an interim prime minister, political reforms and an election.

But neither side backed down from their entrenched positions.

"As we cannot find a way to bring the country to peace and everyone won't back down I would like to announce that I will take power. Everyone must sit still," Prayuth said. The army has clamped down on the media, including partisan television channels.

Leaders of the ruling Puea Thai Party and the opposition Democrat Party, the Senate leader and the Election Commission had joined the second round of talks yesterday.

Acting Prime Minister Niwatthamrong Boonsongphaisan, who did not attend, said that his government could not resign as its enemies were demanding as that would contravene the constitution.

"The government wants the problem solved in a democratic way which includes a government that comes from elections," he said.

Yingluck was forced to step down as premier by a court two weeks ago, but her caretaker government had remained nominally in power.

The government and its supporters said a general election that it would likely win was the best way forward and it had proposed polls on Aug. 3, to be followed by reforms.