Tens of thousands of Bolivians have rallied in Santa Cruz - the country's economic capital - to protest against cuts in fuel subsidies. Organisers pledged that the protests, the culmination of days of unrest over fuel prices, would remain peaceful.
Demonstrators in Santa Cruz also vowed to proceed with plans to declare autonomy for their wealthy region.
Troops have surrounded several key oil installations around the city, after clashes with riot police on Thursday.
A senior official said the atmosphere was extremely tense and urged both sides to settle the dispute in the city, about 900km (550miles) southeast of the capital, La Paz.
State ombudsman Waldo Albarracin told the BBC that he had spoken to Bolivian President Carlos Mesa who was deeply troubled by the situation but did not believe it would affect either the direction or the stability of his government.
More than 200 activists are reported to have gone on hunger strike, and students have been occupying public buildings in Santa Cruz city - Bolivia's economic powerhouse - since Wednesday.
Airport workers in Santa Cruz have also joined the protests, blocking the airport as well roads to the city.
The protesters are backed by powerful local business leaders, who also want greater regional autonomy.
In a symbolic gesture, representatives of the region's Civic Committee reportedly handed more than 500,000 signatures to congressmen to back up their demand for self-rule.
And in open defiance to the central government, they proclaimed the committee's president, Ruben Costas, as their governor.
Many analysts have predicted that protests against fuel price rises are a pretext for achieving autonomy for Santa Cruz.
Self-rule could have a major impact on Bolivia's economy, as the Santa Cruz region account for 33% of the country's economic output, BBC regional correspondent Eliott Gotkine says.
Self-rule would mean less tax revenues going to La Paz
He adds that it could also prompt other regions - like gas-rich Tarija - to follow suit.
A special parliamentary commission has already been sent from La Paz to Santa Cruz to try to settle the dispute.
The government says the subsidies needed to keep prices low are unsustainable, and encourage people to resell fuel abroad illegally.
However the strength of opposition to the price increases have forced President Mesa to review his plans.
He announced on Wednesday that the price of diesel would rise by 15%, not the 23% originally announced.
In La Paz, supporters of Mr Mesa gathered to pray for him.
"I wish for this energy of yours, that I know you have delivered to God, to be transmitted to the whole country," Mr Mesa told them.
In October 2003, at least 58 people were killed during protests against government plans to export natural gas.