Talks to end Thai crisis inconclusive, new round called

"Homework handed out"

The anti-government protesters are opposed to an election, which Thaksin's loyalist would be likely to win. They want a "neutral" prime minister installed to oversee electoral reforms aimed at ending Thaksin's influence.

The government sees a general election as the best way forward and has proposed a new vote on August 3. The anti-government protesters disrupted an election in February that was later annulled, and they have vowed to do so again.

Whether all sides could accept an interim prime minister and what reforms could be implemented were also raised at the talks, Thida said.

An army spokesman said all sides would go away to think.

"There was no conclusion. It is as though homework was handed out for each side to work on," deputy army spokesman Winthai Suvaree told reporters.

Military sources say Prayuth is believed to favour the appointment of an interim prime minister by the Senate, who would then shepherd through reforms.

The United States, a close ally of Thailand and its military, said it was "encouraged" by reports that the meeting had taken place, although State Department spokeswoman Jen Psaki added: "Obviously, there is a great deal more work that needs to be done."

"Broadly speaking, we believe that dialogue between the parties is a positive step," she told a regular briefing.

"We continue to be troubled by restrictions on the media," Psaki added. "In our communications with the Royal Thai Army, we are encouraging them to respect democratic principles, including freedom of speech and the press."

Washington has stressed the need for the army to honour its commitment to make martial law temporary and Psaki reiterated that the United Stated wanted to see a return to full democracy.

Twenty-eight people have been killed and 700 injured since this latest chapter in the power struggle between Thaksin and the royalist elite flared up late last year.

Both pro- and anti-government protesters remain out in force, but the army has confined them to their separate protest sites and there were no reports of trouble overnight.