In his weekly television address, Abhisit said money would be invested in the region's tourism, rubber, palm oil and fisheries industries to raise living standards and counter attempts by militant groups to derail the government's peace efforts.

"Thailand is a unity country under the same constitution which needs some privileges, such as economic developing programs, to save people from poor living," Abhisit said. "The development programmes will range from tourism to farming, including rubber, palm oil and fisheries projects."

Abhisit did not say how much money would be invested or give a timeframe for the implementation of the projects.

Nearly 3,500 people have been killed in violence since 2004 in Yala, Pattani and Narathiwat provinces near the Malaysian border, which provide 10 percent of the rubber output of Thailand, the world's biggest producer.

The violence has intensified in recent weeks, with 27 people killed and more than 50 injured over the last nine days. The victims have ranged from teachers, soldiers and Buddhist monks to Muslims praying in a mosque.

Abhisit said there would be no "iron fist" approach to ending the violence and he urged people to prevent rebels from creating rifts between Muslims and the region's minority Buddhists.