Embattled Prime Minister Yingluck Shinawatra rejected anti-government protesters' demands that she resign and hand over power to an unelected "people's council", but said she was willing to consider other options as long as they were constitutional.
A warrant was also issued for the arrest of Mr Suthep Thaugsuban for treason in connection with his bid to topple the government.
But the protest leader remained defiant, telling supporters last night: "It is a choice between the Thaksin regime and people's power. There is no time left."
As police continued to battle thousands of protesters bent on taking over key government buildings on Monday, Ms Yingluck appealed for peace at a press conference that put to rest rumours she had fled the country.
Facing the biggest test of her two-year administration, she said: "I have no idea how to proceed with (the protesters') demands, which have no constitutional or legal basis."
But she added that she was "open to all options".
Ms Yingluck pledged that the government would not use violence against protesters, despite reports that the police were increasingly using rubber bullets to fend off attacks on Government House and other key buildings.
Addressing growing apprehension of a military coup, she said the military "is neutral".
Her press conference came after her meeting with Mr Suthep on Sunday night. The Democrat Party politician, who is leading the self-styled People's Democratic Reform Committee, had given the PM two days to step down.