But while a sumptuous banquet dinner was in preparation, many of the guests seemed more concerned about updates on the thousands of people protesting in the grimy streets a few miles away. Despite the relative calm that has descended on the city – relative, that is, to the violent events last April and May – these guests were uneasy. It is an unease that permeates the larger society outside the ornate palace's gates. The benchmark SET index has lost nearly 8 percent since the first of the year after reaching a 14-year high as inflation concerns continue to mount. In addition, the Thai baht has fallen by nearly 4 percent in 2011, the worst performer among Asia's 10 most traded currencies outside of Japan, according to the Bloomberg News Service. 

Under paintings of past monarchs, and in front of an exquisite 200-year-old pillowed throne, army officers chatted about the possibility of Thailand descending into a violent revolution, or yet another coup, or seemingly Machiavellian moves by the military-backed government and their opponents to win the next election, which Prime Minister Abhisit Vejjajiva has said will be held be sometime this year. Some political analysts believe the polls will be called at some point in the first half of the year.

Guests punctuated their remarks by acknowledging the invited dignitaries, who included Abhisit and the 2006 coup's junta leader, retired Supreme Army Commander Gen. Surayud Chulanont, who is now a member of the king's Privy Council of personal advisers. The new U.S. Ambassador to Thailand, Kristie Kenney, was also present at the evening's ceremony. 

Some guests, including army officers, warned that the Red Shirts' newest twice-monthly street blockades, which attracted 30,000 Reds during January, might escalate into a repeat of the April and May insurrection and clashes with the military, which left 91 people dead, mostly civilians.

One army officer said former Prime Minister Thaksin Shinawatra, whose overthrow in 2006 in a bloodless coup by the US-trained military kicked off four years of political turmoil, was fading away in self-imposed exile abroad. Some Red Shirts are now said to be squeezing the ousted billionaire for money, claiming to support him, but actually hoping to finance newer politicians in their post-Thaksin scheme, the officer said.

The officer grimaced while reflecting on a new street blockade by the Reds' enemies, about 5,000 Yellow Shirts who are desperately trying to stoke nationalist fever, topple the government, and push Thailand into a shooting war with Cambodia over their disputed border.

Vengeful Yellow Shirts feel left out of the present government, after they mobilized street demonstrations during Thaksin's administration that paved the way for the 2006 coup.

Under massive chandeliers, some guests wanly said they hoped Army Chief Gen. Prayuth Chan-ocha was telling the truth when he insisted during the past several days that he "did not want to stage a coup," despite his role in the September 2006 putsch.

"The 2006 coup did not solve anything and only helped fuel and deepen the divisions we still face," wrote Bangkok Post Editor-in-Chief Pichai Cheunsuksawadi on Tuesday (February 1). "Please, no more coups."

The Grand Palace's reception rooms echoed optimism about Prime Minister Abhisit's coalition winning the next election before his term runs out at the end of 2011, or at least forming another coalition even if they had to use sleaze and muscle to outnumber the popular Reds. The 46-year-old premier said earlier this week in Davos that he believes polls show the ruling coalition, led by his Democrat Party, to be leading. Winning would counter criticism over the fact that his prime ministry was never endorsed by a nationwide election after he gained power by cobbling together a coalition in Parliament.

Meanwhile, outside in the balmy night, the Red Shirts and Yellow Shirts were dividing Bangkok's streets to stage rival demonstrations, while security forces hoped to keep them apart and stop possible provocateurs.

The Yellow Shirts became pariahs when they blockaded Bangkok's two international airports in November 2008, stranding more than 300,000 passengers worldwide for eight days and crippling this Buddhist Southeast Asian nation's capitalist economy.

Fear and cynicism have now permeated Thailand to the point that when police on Jan. 24 arrested a suspect allegedly carrying two homemade bombs, apparently aiming to bloody the Yellow Shirts' street blockade, politicians and the media questioned whether or not the police were lying.

The Yellow Shirts have been mocking Abhisit and the military for refusing to open fire against Cambodia, after seven of their supporters illegally walked across the disputed border on Dec. 29 and were jailed in Cambodia. Five were released on Jan. 23, but Cambodia sentenced two hard-core Yellow Shirts to six and eight years in prison on Feb. 1 for illegal entry and spying.

Thailand's military, meanwhile, insists the army is not scared of Cambodia's hardened troops.

"We soldiers are strong and are afraid of no one," Defense Minister Gen. Prawit Wongsuwon said on Jan. 27. "Don't brand us as softies."

Despite the urban unrest, Bangkok's repressive state of emergency was recently lifted, and the lively capital is now clamped under a slightly less harsh Internal Security Act. The government is allowing the Red and Yellow street protests, hoping they will remain peaceful and not require the armored personnel carriers, army snipers and other weaponry used during last spring's Red insurrection.

International investors, merchants, hotel owners and others, however, complain that Bangkok's frequently blocked streets are causing them to lose millions of dollars. Tourists have been relatively safe, but many are holidaying elsewhere because some streets have again become chaotic.