Armoured vehicles rammed into the doors of the presidential palace in Bolivia's capital Wednesday as President Luis Arce said the country was facing an attempted coup by the military.

"Here we are, firm in Casa Grande, to confront any coup attempt," he said in a video in the palace, surrounded by cabinet ministers. "We need the Bolivian people to organize."

Arce swore in new military leaders amid the attempted coup. That includes the position of the general commander of the army, Juan José Zúñiga, who appears to be leading the rebellion. 

New army chief José Wilson Sánchez is ordering all mobilized troops to return to their barracks. "No one wants the images we're seeing in the streets," he said.

'I will not allow this insubordination': president

Previously, Arce confronted Zúñiga in the palace hallway, as shown on video on Bolivian television: "I am your captain, and I order you to withdraw your soldiers, and I will not allow this insubordination," Arce said.

But prior to entering the government building, Zúñiga told reporters in the square that there will be a "new cabinet of ministers."

WATCH | Bolivian troops take over central square in capital: 

Bolivian troops take over central square in capital

Members of Bolivia's armed forces entered one of the main squares in La Paz on Wednesday, as the country's president condemned the movements. Some in the capital held signs saying, 'Democracy must be respected.'

"Surely things will change, but our country cannot continue like this any longer," he told a local TV station.

"Stop destroying, stop impoverishing our country, stop humiliating our army," he said in full uniform, flanked by soldiers, insisting the action being taken was supported by the public.

Arce called for "democracy to be respected" in a message on his X account. 

"We cannot allow, once again, coup attempts to take the lives of Bolivians," he said from inside the palace, surrounded by government officials, in a video message sent to news outlets.

Tensions over the economy

Bolivia, a country of 12 million people, has seen intensifying protests in recent months over the economy's precipitous decline from one of the continent's fastest-growing two decades ago to one of its most crisis-stricken.

Bolivia's financial quagmire stems, at least in part, from an unprecedented rift at the highest levels of the governing party.

Arce and his one-time ally, leftist icon and former president Evo Morales, are battling for the future of Bolivia's splintering Movement for Socialism (MAS) ahead of elections in 2025.

The political fight has paralyzed the government's efforts to deal with the deepening economic despair, and analysts had warned that the social unrest could explode in the historically turbulent nation of 12 million people.

Cracks in the governing party opened in 2019, when Morales, then Bolivia's first Indigenous president, ran for an unconstitutional third term. He won a contested vote plagued by allegations of fraud, setting off mass protests that caused 36 deaths and prompted Morales to resign and flee the country.

After an interim government took control in what MAS called a coup, Morales's chosen successor, Arce, won the election on a campaign promise to restore prosperity to Bolivia, once Latin America's mainstay source of natural gas.

Morales rallies supporters to oppose coup

Arce had been Morales's finance minister who oversaw years of strong growth and low inflation. But assuming the presidency in 2020, he encountered a bleak economic reckoning from the coronavirus pandemic. Diminished gas production sealed the end of Bolivia's budget-busting economic model.

Still hugely popular among Bolivia's Indigenous communities, coca growers and union workers, Morales saw an opportunity. After returning from exile, the charismatic populist announced plans last year to run in the 2025 vote — setting himself on a collision course with Arce, who is expected to seek re-election.

Morales, to his credit, announced a national mobilization of his supporters in the wake of the apparent coup attempt.

"We will not allow the armed forces to violate democracy and intimidate people," he said.