BANGKOK, Thailand -- Desperate to defuse Thailand's deepening political crisis, Prime Minister Yingluck Shinawatra dissolved Parliament's lower house on Monday and called early elections. But protesters seeking to topple her vowed to carry on their fight, saying they cannot win the polls because of corruption.

A decree from King Bhumibol Adulyadej scheduled the elections on Feb. 2 and named Yingluck as interim prime minister until then. The protesters demanded that she resign as caretaker and rejected the election date, putting the strongly royalist movement at odds with the royal decree.

Protest leader Suthep Thaugsuban, who faces an arrest warrant on insurrection charges, spoke to more than 150,000 followers at a stage outside Yingluck's offices, challenging authorities to "Come get me!"

He claimed that his movement was assuming some functions of government, citing a clause in the constitution stating that "the highest power is the sovereign power of the people."

"This means that from now on the people will appoint the prime minister of the people and appoint the government of the people," he told the cheering crowd.

He said a new prime minister and a non-elected "people's council" -- which has no basis in the constitution -- would work to end corruption in politics and keep Yingluck and her brother, former Prime Minister Thaksin Shinawatra, from returning to power.

The opposition Democrat Party, allied with the protest movement, has been defeated by Thaksin-allied parties in every election since 2001, and is unlikely to win the new polls.

Thaksin, a former telecommunications billionaire, was toppled by a 2006 military coup that laid bare a deeper conflict between Thailand's elite and largely urban middle class on one side, and Thaksin's power base in the countryside on the other. That base benefited from his populist policies designed to win over the rural poor.

The two sides have been dueling for power, sometimes violently, since Thaksin was ousted for alleged corruption and abuse of power.

Yingluck announced the Parliament dissolution in a televised speech that broke into regular programming.

"We have given the power back to the people to decide and have elections according to the democratic system under the king," she said, her voice shaking. "We'll let the people decide what path the majority wants to take, and Thailand will take that path to administering the country."

Analysts said she may have had no alternative.

"My suspicion is that the military was not prepared to do anything to save the government," said Kevin Hewison, a senior scholar of Thai politics at Australia's Murdoch University. "Hence, Yingluck had little choice, and the dissolution may have been forced on her. But the hard-liners will now demand more, and she has nothing to give."

After Yingluck called the elections, the United States said in a statement it supports the democratic process in Thailand, a long-time friend and ally.

"We encourage all involved to resolve political differences peacefully and democratically in a way that reflects the will of the Thai people and strengthens the rule of law," State Department spokeswoman Jen Psaki said.

Suthep spoke three times Monday night, calling for civil servants to report to the protest group instead of the government, and urging citizens to set up their own neighbourhood peacekeeping forces to take over from police. The protesters have castigated the police for being zealous defenders of the government.

If we lose to the "Thaksin regime," he said, "we will be their slaves until we die."

It was unclear how those ideas could be achievable, since Suthep, who resigned as an opposition lawmaker last month, controls no administrative structure for anyone to report to.

A measure of political calm that was restored when Yingluck took office two years ago was upended last month by an attempt by her party to pass a bill that would have granted amnesty to Thaksin and others. Thaksin fled overseas in 2008 to avoid a corruption conviction he says was politically motivated.

Her government was forced to abandon the amnesty attempt, but the move stoked the long-simmering anti-Thaksin movement.

The Democrat Party added to the political pressure on Sunday when its lawmakers resigned en masse. It held 153 of the 500 seats in the lower house.

Since the latest unrest began last month, at least five people have been killed and at least 289 injured. Violence ended suddenly last week as both sides paused to celebrate the birthday of the king, who turned 86 last Thursday.

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Associated Press writers Jocelyn Gecker, Todd Pitman, Tim Sullivan and Sinfah Tunsarawuth in Bangkok, and Matthew Pennington in Washington contributed to this report.