TEGUCIGALPA, Honduras - Baton-wielding soldiers used tear gas and water cannons to chase away thousands who demonstrated outside the Brazilian embassy, leaving deposed President Manuel Zelaya and 70 friends and family trapped inside without water, electricity or phones.

"We know we are in danger," Zelaya said during interviews with various media outlets on Tuesday. "We are ready to risk everything, to sacrifice."

Heavily armed soldiers stood guard on neighbouring rooftops and helicopters buzzed overhead.

Zelaya, forced out of his country at gunpoint, triumphantly popped up in the capital on Monday, telling captivated supporters that after three months of international exile and a secretive 15-hour cross country journey, he was ready to lead again.

Interim President Roberto Micheletti's response was terse: initially he said Zelaya was lying about being there, and then - after Zelaya appeared on national television - Micheletti pressed Brazil to hand Zelaya over so he could be arrested under a warrant issued by the Supreme Court charging treason and abuse of authority.

Some officials suggested even the embassy would be no haven.

"The inviolability of a diplomatic mission does not imply the protection of delinquents or fugitives from justice," said Micheletti's foreign ministry adviser, Mario Fortinthe.

Police and soldiers set up a ring of security in a three-mile (five-kilometre) perimeter around the Brazilian embassy.

Security Ministry spokesman Orlin Cerrato told The Associated Press that two policemen had been beaten and 174 people were being held on charges of disorderly conduct and vandalism.

A doctor interviewed by Radio Globo reported that 18 people had been treated at the public hospital for injuries.

Micheletti repeated his insistence that there had never been a coup - just a "constitutional succession" ordered by the courts and approved by Congress.

"Coups do not allow freedom of assembly," he wrote in a column published Tuesday in the Washington Post. "They do not guarantee freedom of the press, much less a respect for human rights. In Honduras, these freedoms remain intact and vibrant."

Meanwhile Micheletti closed airports and borders, and baton-wielding police fired tear gas to chase thousands of demonstrators away from the embassy where Zelaya's supporters had gathered.

Some gas canisters fell inside the walls of the Brazilian embassy, where Zelaya, his wife, some of their children, Cabinet members and journalists held hushed conversations, napped on couches and curled up on the floor beneath travel posters of Brazilian beaches.

Zelaya said he had no plans to leave and he repeatedly asked to speak with Micheletti.

Those negotiations have yet to begin, and with his embassy the current hotspot for the Honduran crisis, Brazil's president Luiz Inacio Lula da Silva called Zelaya and pressed him not to do anything that might provoke an invasion of the diplomatic mission.

Embassy staff were told to stay home and most did, while and embassy charge d'affaires Francisco Catunda Resende said water, phone and electricity services had been cut, leaving the mission with a diesel powered generator, according to a spokesman with Brazil's Foreign Ministry who did not give his name in keeping with policy.

A senior U.S. official said that Brazil has asked for U.S. assistance in restoring power and water to the embassy, and in acquiring generators, fuel and water. He said that the U.S. was looking for ways to help, but did not say what the U.S. was doing. The official asked for anonymity, because he was not authorized to speak on the record on the issue.

Diplomats around the world, from the European Union to the U.S. State Department, were urging calm while repeating their recognition of Zelaya as Honduras' legitimate president.

The secretary general of the Organization of American States, who is trying to convince Micheletti to step down and return Zelaya to power, said he was "very concerned" that the situation could turn violent.

"It's a hostile situation and I hope the de facto government fulfills its obligation to respect this diplomatic seat," said Jose Miguel Insulza.

Zelaya apparently timed his surprise arrival in Honduras' capital to coincide with world leaders gathering this week at the United Nations in New York, putting renewed international pressure on the interim government, which has already shrugged aside sharp foreign aid cuts and diplomatic denunciations since the coup.

A 26-hour curfew imposed Monday afternoon left the closed businesses and schools, leaving the capital's streets nearly deserted. All the nation's international airports and border posts were closed and roadblocks set up to keep Zelaya supporters from massing for protests.

Zelaya loyalists ignored the decree and surrounded the embassy, dancing and cheering and using their cellphones to light up the streets after electricity was cut off on the block housing the embassy Monday night.

Police cleared them away with clubs, tear gas, jets of water and deafening music early Tuesday.

Zelaya was removed in June after he repeatedly ignored court orders to drop plans for a referendum on reforming the constitution. His opponents feared he wanted to end a constitutional ban on re-election - a charge Zelaya denied.

The Supreme Court ordered his arrest, and the Honduran Congress, alarmed by his increasingly close alliance with leftist Venezuelan President Hugo Chavez and Cuba, backed the army as it forced him into exile in Costa Rica.

For the past three months Zelaya has travelled to around the region to lobby for support from political leaders, including U.S. Secretary of State Hillary Rodham Clinton.

U.S.-backed talks moderated by Costa Rican President Oscar Arias stalled over the interim government's refusal to accept Zelaya's reinstatement to the presidency. That proposed power-sharing agreement would limit his powers and prohibit him from attempting to revise the constitution.

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Associated Press writers Freddy Cuevas in Tegucigalpa, Michael Astor in New York, Desmond Butler in Washington and Marco Sibaja in Brasilia, Brazil contributed to this report.