(Recasts with decision to go ahead with Feb. 2 election)
By Amy Sawitta Lefevre and Pracha Hariraksapitak
BANGKOK, Jan 28 (Reuters) - Thailand's prime minister has confirmed a general election will go ahead on Sunday despite a warning that it could end in chaos in the face of months of at times violent anti-government protests.
In a separate part of an army complex in Bangkok where Prime Minister Yingluck Shinawatra was meeting Election Commission officials, shots were fired in a group of anti-government protesters. Two people were injured.
"We have to go forward with the election. The Election Commission will organise the election under the framework of the constitution and try to avoid any violence," Deputy Prime Minister Pongthep Thepkanchana told a news conference.
Yingluck had called the snap election in the hope of confirming her hold on power and putting an end to the protests in the capital which began in November in an attempt to force her from office.
The protests are the latest eruption in a political conflict that has gripped Thailand for eight years and which is starting to hurt growth and investor confidence in Southeast Asia's second-largest economy.
The conflict broadly pits Bangkok's middle class and royalist establishment against the mainly poor, rural backers of Yingluck and her brother, ousted former premier Thaksin Shinawatra.
The protesters have rejected the election, which Yingluck's ruling party looks set to win, and prevented advance voting in many parts of Bangkok and the south on Sunday.
The Commission has been pressing for a delay in the election because of the unrest and wants it delayed by up to four months.
Ten people have been killed since the protests began and hundreds have been wounded.
The latest shooting was where about 500 anti-government protesters had gathered at the Army Club compound in Bangkok where Yingluck held a cabinet meeting before meeting the Election Commission. The shooting took place far from that meeting.
"Someone fired shots. One protester was hurt and the man who fired the shots was hurt too. They have been sent to different hospitals," Chumpol Jumsai, a protest leader who was at the facility in north Bangkok, told Reuters.
The protesters want to suspend what they say is a fragile democracy destabilised by former telecoms tycoon Thaksin, whom they accuse of nepotism and corruption. They want to eradicate the political influence of his family by altering electoral arrangements in ways they have not spelt out.
"CHAOS WILL ENSUE"
The Election Commission has argued that the country is too unsettled to hold an election now. It also points out that candidates have been unable to register in some constituencies, meaning there would not be a quorum to open parliament even if voting went ahead.
"We believe chaos will ensue ... Our new recommendation is to hold elections within three or four months," Somchai Srisutthiyakorn, a member of the Election Commission, told reporters as he went into the meeting.
As the protest movement drags on into its third month, the government has issued an ultimatum to leaders that they face arrest by Thursday if they do not give up areas of Bangkok they have taken over.
The government has declared a state of emergency in the capital and Labour Minister Chalerm Yoobumrung, in charge of enforcing the decree, said an arrest warrant would be sought against protest leader Suthep Thaugsuban and others on Tuesday.
"If the court issues arrest warrants for the protest leaders at 3 p.m. today, we will start capturing them. Suthep has refused to negotiate with us so we don't know what else to do," Chalerm told reporters.
The government declared the emergency last week but it has shown no sign of using its powers, nor did authorities move to arrest Suthep after earlier arrest warrants were issued.
Suthep has said in return that his supporters would shut down the emergency agency headed by Chalerm within 24 hours.
There are widespread fears that violence could escalate in the increasingly divisive dispute and that the army might step in. It has staged or attempted 18 coups in 80 years of on-off democracy but has tried to remain neutral this time.
Yingluck is Thailand's fifth prime minister since the populist Thaksin was toppled by the army in 2006 and went into exile two years later to escape a jail sentence that was handed down for abuse of power. (Writing by Jonathan Thatcher and Alan Raybould; Editing by Robert Birsel)
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