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Conflicts, sometimes violent, between the two rival groups have been cited as the reason why tourists are staying away from Chiang Mai.

"The provincial Chamber of Commerce coordinated the first talk with representatives from both groups two weeks ago and a second discussion on Monday," one of the sources said.

After the meetings, a joint working group was set up to draft an agreement, said the source, adding that a press conference would be held next Monday about the matter.

"The agreement focuses on the groups holding demonstrations that respect other people's rights and remind them of being good hosts so tourist confidence can be restored," the source opined.

There are many red and yellow shirt splinter groups in Chiang Mai, and some of the most active and violent ones refused to send representatives to the meetings.

Mahawan Kawang, leader of the Society of Thaksin Admirers in Chiang Mai, said the participants of the meetings agreed that the conflict should be toned down so it does not affect the tourism industry ahead of this year's "high season".

He said foreign diplomats would be invited to the press conference on Monday, adding that measures would also be adopted to punish any groups that fail to abide by the joint agreement.

Promsak Saenpho, who heads the red-shirt Confederation of Grassroots People of the North, said the statement would be submitted to Chiang Mai's governor to show that they are serious.

"The goal is to restore a pleasant environment for tourists in Chiang Mai," he said. "The country will be victorious if unity is restored and the political colours are destroyed."