About 1,000 people wearing yellow headbands and chanting "Junta -- get out!" gathered at a central Bangkok intersection hemmed in by hundreds of police who refused to let the demonstration move.

"We are not allowing them to hold rally," said Colonel Supisarn Bhakdinarinach, metropolitan police spokesman.

The turnout was smaller than that expected by the authorities, who earlier said they were expecting thousands of Thai Rak Thai (TRT) members to join a rally by a group supporting ex-prime minister Thaksin Shinawatra.

Army chief Sonthi Boonyaratglin told AFP said an indefinite crackdown had been imposed with extra checkpoints and other security measures, and with Thaksin's "hardcore" allies under close watch.

"Security measures have been stepped up since last night and will gradually be increased. The measures will be in place for a long time," said the general, who led the coup against Thaksin in September.

Thaksin, now living in London, apologised to his party over the court ruling handed down late Wednesday.

"I, as founder and leader of the party ... apologise to all party members, executives and supporters who have met with this unexpected fate," he wrote in a letter handed out to media.

Thaksin's party was found guilty of fraud in April 2006 elections, which were later annulled amid a flurry of allegations of wrongdoing.

The court, which was appointed by the junta, dissolved the party and banned Thaksin and other party leaders from politics for five years.

"The Thai Rak Thai party did not respect the rule of law," one judge said, adding that it "cannot exist as a political party."

Analysts said the move raised question marks over the credibility of polls and the restoration of democracy promised by the military junta.

"I think it is going to be very rocky, very turbulent, unless they can win over Thai Rak Thai voters," said political analyst Thitinan Pongsudhirak at Bangkok's Chulalongkorn University.

"They have not made any effort to do that. ... There is a big gap here, there is a neglected electorate," he added.

Chaturon Chaisang, the current leader of TRT, on Thursday called the verdict an attempt to punish elected leaders.

"It's as if my party members were executed for breaking a glass window while those who made the rules had burned down the house," the former deputy prime minister told media.