State Department spokesman Sean McCormack withheld formal comment on the reports that Thailand's ruling junta had selected retired general Surayud Chulanont, 63, to replace Thaksin pending confirmation of the appointment.

"But certainly somebody with close ties to the military is going to have to at least overcome the perception that they are maintaining a close relationship with the military and may be not acting in defence of Thai democracy," McCormack said.

Thaksin was toppled by the military on September 19 as he was attending the UN General Assembly in New York.

The junta, with the backing of Thailand's revered King, pledged to appoint a new premier within two weeks to guide the country towards elections in October 2007.

State-run Thai radio and other media reported on Friday that the military had chosen Surayud, an adviser to the King, as prime minister and that the appointment would be announced tomorrow.

But a military source in Bangkok challenged the report, saying Surayud had turned down the job.

Another possible prime ministerial candidate was former World Trade Organisation chief and current head of the UN Conference on Trade and Development, Supachai Panitchpakdi.

The US condemned the coup and on Thursday announced the suspension of nearly US$24 million (Bt902 million) in aid to the Thai military, as required by US law.

McCormack said the US continued to watch developments in Thailand "very closely": who is appointed as prime minister, that person's background, the policies that they pursue.

"We certainly hope that that person is somebody who has the deep interests of Thai democracy at heart and who not only abides by the principles of democracy but acts in their defence in getting Thailand back on the pathway to democracy as quickly as possible," he said.

The Nation, Agencies

WASHINGTON