Thai Prime Minister Thaksin Shinawatra has admitted the army made mistakes leading to the death of 78 Muslims in its custody as distraught relatives retrieved bodies at a military base in the deep south.
Amid fears of a violent backlash in the restive, mainly Muslim region, around 300 sobbing relatives pored over lists of victims outside the barracks in Pattani, a provincial capital 1,100 km (700 miles) south of Bangkok.
More than 1,200 men rounded up after Monday's protest at a police station in the neighbouring province of Narathiwat are being held at the base, along with the bodies of the 78 who died of suffocation in overcrowded army trucks.
"I came to pick up my dead nephew. I am sad for what has happened. I never thought this would happen," said a 58-year-old Narathiwat village chief.
As soldiers with loudspeakers told the crowd the detainees were "alive and being treated well", Thaksin said the army should not have crammed protesters into military trucks for the 100 km (60 miles) trip to a holding centre on the army base.
More than 440 people have now been killed in 10 months of violence that looks increasingly like a Muslim separatist insurgency in Thailand's three southernmost provinces.
"I can say that the government resorted to gentle measures and did not use force in suppressing the protesters. But mistakes happened during the transport of the arrested people to trucks," Thaksin told parliament on Wednesday.
"I regret the loss of lives in a way that should not have happened, due to suffocation."
Six men were killed at the scene of the protest, called to demand the release of six Muslim villagers accused of giving government-issue shotguns to militants. Another man died in hospital on Tuesday night, bringing the total death toll to 85.
It was the worst violence in the mainly Muslim tip of the otherwise Buddhist kingdom since April 28, when troops and police shot dead 106 machete-wielding Muslim militants.
STOCK MARKET FALL
The Pattani United Liberation Organisation (PULO), a separatist group dormant since the 1980s, said insurgents would take their fight to Bangkok, where the stock market fell 2.5 percent on heightened security fears.
"Their capital will be burned down in the same way the Pattani capital has been burned," PULO said in a statement on its website. "Their blood will be shed on the soil and flow into water. Our weapon is fire and oil, fire and oil, fire and oil."
The group, which is not thought to have an active militant arm, was involved in a violent campaign in the 1970s and 1980s for an independent Muslim Kingdom of Pattani between southern Thailand and northern Malaysia.
Besides foreign investors, who dealers said were behind the stock market sell-off, Thailand's neighbours are also worried.
"This latest issue will create more instability and dissatisfaction and we are very worried that people will rise against the government," said Mohamad Hatta, a top official in the main Islamic party in neighbouring Malaysia.
Indonesia, the world's most populous Muslim country, said it was saddened by the deaths and worried about rising tension.
"Indonesia is confident that the government of Thailand would conduct appropriate inquiries to shed light about the tragic accident," a Foreign Ministry spokesman said.
"MASSACRE"
Thai Muslim leaders said the incident, already being labelled a "massacre", would inflame the unrest, and could transform the relatively impoverished region into a fertile recruiting ground for the likes of Osama bin Laden's al Qaeda network.
"The situation down here will definitely turn much bloodier. Those militants who were responsible for trouble in the area will fight back harshly with suicide attacks," Nideh Waba, chairman of a religious schools association, told the Bangkok Post newspaper.
The Hong Kong-based Asian Human Rights Commission (ARHC) called for an independent inquiry into security forces' handling of the protest, in which troops and police also fired live ammunition, teargas and water cannon.
Suggesting police in the south have been given freedom to act outside the law, the ARHC said the deaths were a direct consequence of the "intentional and dramatic weakening of controls over the police and armed forces" in the past two years.
The Nation newspaper blamed Thaksin's "contempt for human rights", saying he had adopted an iron-fisted approach to the south, which is home to most of Thailand's six million Muslims.
"Now this flawed trait of his leadership is threatening to plunge the country into the bitterest and most detrimental divide between people and state," it said.
With an election expected early next year, Thaksin is under political pressure to resolve the trouble, but the Bangkok Post said military might was not the answer.
"The government must realise that brute force alone will not pacify the restive South. And it will never succeed in winning the war against Islamic militants without the support and cooperation of local Muslims."