The political crisis that has engulfed Bangkok for more than a week has eased after the prime minister ordered police to stop battling anti-government protesters.

The move was timed to coincide with celebrations of the king's birthday later this week, a holiday that holds deep significance in Thailand.

In a sharp reversal in strategy that followed two days of increasingly fierce street fighting, riot police lowered their shields and walked away from heavily fortified positions around Prime Minister Yingluck Shinawatra's office at Government House.

Shortly afterward, thousands of jubilant demonstrators waving the red, white and blue Thai flag swarmed across the compound's lawn, screaming "Victory belongs to the people!"

The government move was widely seen as offering demonstrators a face-saving way out, and the government expressed hope it would defuse a conflict that has killed four people and wounded more than 256 in the last three days alone. Protest leader Suthep Thaugsuban, however, vowed to keep up what has become an audacious struggle to topple Ms Yingluck and keep her brother, former Prime Minister Thaksin Shinawatra, from returning to power.

Mr Thaksin was ousted in a 2006 military coup, and Ms Yingluck's rivals have repeatedly accused her of being his puppet.

The protests that have convulsed Bangkok this month are part of a deep societal split that has plagued Thailand for nearly a decade. The conflict pits the majority rural poor who back the Shinawatra family against an urban-based elite establishment that draws support from the army and staunch royalists who see Thaksin and allied governments that have succeeded him as a corrupt threat to their business interests and the monarchy.

After seizing several government ministries last week, and smashing barricades with bulldozers and commandeered police trucks in street fighting that erupted this weekend in isolated pockets of the city, the protesters refused all offers to negotiate.

Instead, they demanded Ms Yingluck's government hand power to an unelected council that would appoint a new premier - a demand she flatly rejected.

Many political observers and Thai academics see the protesters' demands as unreasonable, if not absurd. Ms Yingluck's Pheu Thai party was elected with an overwhelming majority in 2011 and is currently unbeatable at the polls.

On Sunday and yesterday, masked demonstrators tried to break through concrete barriers surrounding Government House and other offices in a historic quarter of the capital that is home to some of Bangkok's main tourist attractions. They fired homemade rocket launchers and petrol bombs at police, who riposted with tear gas, water cannons and rubber bullets.

Early today, the skirmishes began again. But after a few minutes, police stopped firing back, and disappeared.

Bewildered protesters, who had been fighting just moments before, began climbing over rows of overturned concrete blast walls. They walked over shattered glass scattered in the road. They passed the burned and smashed remains of a dozen police trucks, several of them still smouldering after being set ablaze the night before.

Soon, they met thousands of other demonstrators streaming in from the opposite direction on foot, and on trucks and motorcycles. One man cut through a padlocked chain at a southern entrance to Government House, and everybody swarmed inside.

About 20 soldiers and police guarded a door into Ms Yingluck's offices, and protesters did not try to enter. After an hour of speeches and cheering, they all filed back out systematically, as their leaders had instructed. The organized exit fuelled speculation that a deal - at least for now - had been struck behind closed doors between the two sides.

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