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It was the first direct talks between the two sides since the fighting started on Thursday.
The Thai government said it would accept a cease-fire offer from the Red Shirt leader on condition that the protestors return to their encampment in central Bangkok.
Earlier on Monday, the Red Shirt protesters had ignored calls by the government to leave their positions in central Bangkok, as troops tightened a security cordon around them.
A small plane dropped leaflets, urging the estimated 5 thousand protesters to abandon their fortified camp by three o'clock Monday afternoon, or face criminal charges and up to two years in prison. The demand had little impact, with unrest still flaring up in various parts of the downtown area.
Also on Monday, Major General Khattiya Sawasdiphol, who was believed to be a military advisor to Red Shirt protestors, died in hospital. He was shot in the head on Thursday, which further fueled tensions and violence.