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The New Zealand Ministry of Foreign Affairs and Trade has declared Bangkok an area of "extreme risk" due to civil unrest and terrorism threats.
It is advising against all travel.
A prolonged political protest in the Thai capital since March has escalated in the past five days. More than 30 civilians have died in violent clashes and "red shirt" protesters are now encircled by government troops.
One New Zealander has been wounded in the conflict and is understood to be in a local hospital inside the army cordon, Prime Minister John Key said yesterday.
In response, Mfat upgraded its travel warnings for Bangkok to "extreme risk" - advising against all travel - and for the rest of Thailand to "high risk".
The Ministry had earlier advised only necessary travel to the city.
New Zealanders currently in Bangkok should consider departing, it said in a statement. About 400 are registered as being in the country.
The embassy remains closed due to its proximity to the violence.
"There is extreme risk to your security in Bangkok due to the uncertain political situation, civil unrest and threat from terrorism," the Ministry said.
It was not clear how long the situation would last, it said.
Access to shops and public transport in Bangkok has also been disrupted.
Protesters last night defied a deadline to leave their camp, but reports say their leader has offered a truce.
Yesterday, the House of Travel said none of its customers in Thailand had yet opted to return home, and less than one in 10 with booked flights into Bangkok had cancelled them.
Some had chosen to stay at hotels farther from the protests or bypass Bangkok and fly straight to other destinations in the country, the travel agency said.
- NZHERALD STAFF