Thousands of protesters in Rangoon, Burma, on Thursday demanded democracy and issued leaflets calling for mass defiance of a shoot-on-sight curfew called on the eve of the expected selection of a new president and party leader. At Rangoon General Hospital, a crowd of several hundred anti-government demonstrators calling for democratic reforms swelled to more than 2,000 by the afternoon, diplomatic sources said. But diplomats said they did not expect the ruling Burma Socialist Program Party and the People's Assembly on Friday to recommend the kinds of change that would end the social unrest that left hundreds dead last week.